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UK hotel rates slip as London capitalises on Olympic boost

By Luke Nicholls , 11-Dec-2013

Only three cities saw an increase in average room price per night in the third quarter of 2013

Only three cities saw an increase in average room price per night in the third quarter of 2013

Average room prices for hotels in most major cities have dropped in the third quarter of 2013, reflecting the year-on-year changes in demand following last year’s Olympic boost.

The Hotel Price Radar, conducted by hotel portal HRS, found that properties across the country – including those in Edinburgh, Liverpool and Bristol – decreased their room prices, bucking the European trend.

Only three cities saw an increase in average room price per night – London, Manchester and Reading, with an increase of 4.1, 3.9 and 4.7 per cent respectively. Hotels in the capital have therefore been able to capitalise on the positive tourism effects last year’s Olympics with an increase in room rates.

Taking in the rest of Europe, London is the second most expensive city, with an average room price of £124.76 - behind Zurich, which charges an average of £128.19.

The biggest room rate reduction in the UK was seen in Edinburgh, with prices dropping by 11.8 per cent. But the Scottish capital remains the second most expensive city in the UK (behind London), with an average room price per night of £108.56.

Fellow Scottish city Glasgow has seen a very marginal change in rates (-0.1 per cent), reflective of the increasing worldwide interest in the city which will be hosting the Commonwealth Games next summer.

Strongest month

These stats follow figures from business advisory firm BDO which revealed that UK hotels collectively enjoyed the ‘strongest month of the year’ in October, with properties in London confirming their rebound and those in the Provinces remaining stable.

According to BDO’s preliminary figures, operators across the country recorded the highest yield growth figures seen so far this year – a further sign that hotels are contributing to the nascent economic recovery.

“The data suggest that hotel operators may have turned a corner during the summer after a particularly sluggish start to the year, and are now making an important contribution to the UK’s economic recovery,” said Robert Barnard, a partner at BDO.

“If hotels are able to maintain this level of performance for the remainder of 2013, then we may see the sector report positive rooms yield growth for the year as a whole, which would have been almost unthinkable back in the spring.”

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