London hotels bounce back for 2012, Provinces continue to plummet

By Luke Nicholls , 01-Mar-2012

Related topics: Business, Trends & Reports, Hotels

After suffering a period of decline in Q4 2011,  London hoteliers are back to their best in the first month of 2012, recording a seven per cent increase in profit per room and a 2.5 per cent rise in RevPAR.

The HotStats Survey reveals a further widening of the London-Provincial financial gap

The HotStats Survey reveals a further widening of the London-Provincial financial gap

According to the latest HotStats survey of 560 full-service hotels across the UK by TRI Consulting, hotels in the capital achieved record-breaking average room rates of £119.33 – 3.2 per cent up on 2010 and seven per cent above the pre-recession high of £111.47 achieved in January 2008.

“Following three consecutive months of RevPAR and profit decline in the last quarter of 2011, hoteliers in London have had a strong beginning to 2012,” said Jonathan Langston, managing director of TRI Consulting.

“That said, we are well into Q1 and the 2012 Olympics flame is quickly approaching the capital, but the only certainty about the performance of London hotels during 2012 is that it will be highly unpredictable. If the first month is anything to go by the capital could hope for yet another record-breaking year.”

The Provinces

In contrast to the strong performance of hotels in London, profit per room at hotels in the Provinces dropped by 14.4 per cent last month, representing the greatest margin of profit decline since February 2011.

While hoteliers in the Provinces achieved year-on-year RevPAR growth of 0.9 per cent in January, this was not sufficient to offset the declines in food and beverage revenue per available room (-1.8 per cent) and meeting room revenue per available room (-9.2 per cent) and as a result TrevPAR in the Provinces declined by 0.6 per cent.

Langston added: “The RevPAR measure is a complete misrepresentation of the current performance of the Provincial hotel market and it is essential that hoteliers, analysts and observers look beyond the three classic measures of performance to truly understand what is happening.

“Somewhat depressingly, and in stark contrast to hotels in London, the performance of the Provincial hotel market suggests that 2012 could be yet another year of challenging trading conditions.”

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