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Hotels across UK hit by tough trading in January

By Lorraine Heller , 28-Feb-2011

Hotels in London were faced with lower demand for their rooms in January, indicating that even the resilience of the capital is impacted by the traditionally tough trading month.

According to the latest HotStats survey from TRI Hospitality Consulting, occupancy decreased by almost 4 per cent in January, although hotels still managed to increase revenue by upping their average room rate by almost 9 per cent.

"After the strong bounce-back in 2010, it was almost inevitable that London hotels’ profit performance would be subdued in what is usually a tough trading month for hotels,” said Jonathan Langston, managing director, TRI Hospitality Consulting.

“It will be interesting to see if this continues throughout the year on the back of an excellent 2010 in London.”

Provincial hardships

January was particularly hard for provincial hoteliers, where business was more susceptible to external influences, such the VAT increase.

HotStats data found that profit performance in provincial hotels decreased by almost 4 per cent in January.

“When examining provincial market performance, it is clear that the domestic traveller is reducing discretionary spend to the detriment of hotel trading performance. In January 2010, the provinces had to deal with adverse weather conditions. This year, an increase in VAT and inflation has resulted in cutbacks in consumer spend,” said Langston.

“With much of the cost saving strategies implemented last year, provincial hoteliers are now reliant on a pick-up in market conditions. It is inappropriate to call a year on the basis of January numbers, and it will be interesting to see how provincial performance evolves in what could be a bumpy 2011.”

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