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Three quarters of hotel general managers expect RevPAR to stabilise or increase after 2012

By Peter Ruddick , 16-Oct-2012

Related topics: Business, Venues, People, Trends & Reports, Hotel Trends, Hotels

While the global economy and the Olympic Games legacy remain concerns, a majority of UK hotel general managers expect revenue per available room (RevPAR) to stabilise or increase next year and into 2014.

With January 2013 on the horizon, HotStats has revealed UK hotel general managers are confident RevPAR will stabilise or increase next year and the year after

With January 2013 on the horizon, HotStats has revealed UK hotel general managers are confident RevPAR will stabilise or increase next year and the year after

In the latest Hotel Confidence Monitor conducted by HotStats, nearly 300 UK chain hotel general managers were asked how confident they were about the future performance of their hotels.

75 per cent of London GMs think RevPAR will increase or stay the same in 2013 while in the provinces the confidence is only marginally less (73.9 per cent).

Looking further forward, 2014 is expected to be even better for the sector with more than 80.3 per cent of general managers outside the capital and 90 per cent in London expecting the same or improved performance - more than half of London GMs think 2014 will see stronger RevPAR postings.

Economy

While HotStats, which was founded by TRI Hospitality Consulting in 1997, found confidence on the rise with less than a third expecting next year to be worse than this and less than a fifth expecting a poorer performance in 2014, the critical factors expected to have an impact on performance have not changed.

When asked what the most important factor expected to impact hotel demand in 2013 was, more than half of provincial GMs and just over a third of those in London pointed to the state of the UK economy.

"Aside from the post-Olympic slump, going into 2013 the major influences on performance for UK hoteliers are expected to remain the same as in recent years, with the state of our economy and the lack of resolution in the European crisis being the primary concerns," Mark Dickens, managing director of HotStats, said.

Less than 1 per cent of provincial hoteliers expect a rise in post-Olympics UK interest to be a factor in hotel demand while 5.8 per cent of London GMs feel it will be an impact. 7.7 per cent of those in London expect a fall in post-Olympics UK demand to be a factor.

Sterling

However Dickens said the strength in the UK currency was a real worry for hotel general managers.

"Additionally, the recovery in the strength of the sterling poses a real threat to leisure demand levels at hotels throughout the UK, a sector which has been the saviour of demand for many provincial markets throughout the recession."

The growth in sterling strength can make holidaying abroad cheaper and leave the UK too expensive for inbound tourists.

HotStats Hotel Confidence Monitor - Q4 2012:

  • 50.9 per cent of provincial GMs and 34.6 per cent of those in the capital think the UK economy will be the most important factor impacting hotel demand in 2013.
  • 25 per cent of London GMs and 26.1 per cent of those in the regions think hotel RevPAR will be worse in 2013.
  • 74.8 per cent of regional GMs and 53.6 per cent of those in London think the Olympic legacy will have no effect on their business.
  • 35.7 per cent of London GMs and 15.7 per cent of those in the regions thing their average room rate will increase by less than 2.5 per cent in the fourth quarter of 2012.
  • 28.6 per cent of London hoteliers and 26.6 per cent of their provincial counterparts expect to increase their staffing or marketing budgets in the fourth quarter of the year.

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