Luxury hotels in London have reported a 9.7 per cent drop in revPar for June, as they strive to offer guests better deals to maintain occupancy.
The latest City Review from Christie and Co, using data from STR Global, shows that London’s upscale hotels have seen an average room rate decline of 7.4 per cent for the year to June, resulting in the steepest monthly revPar drop since January.
Figures show that the recession has had a dramatic impact on business travellers’ choice of hotel, with 28 per cent expecting to downgrade from 4 and 5-star hotels. Almost half of executives expect to take fewer trips during 2009, while 63 per cent expected their companies to take advantage of the downturn and negotiate room rates.
Andreas Scriven, head of consultancy at Christie and Co, said: “The longer trading performance remains depressed, the more likely a reversion to the average rate ‘dumping’ witnessed in previous recessions, becomes. This might potentially put at risk the image of exclusivity that many of the assets in this market segment enjoy."
Christie and Co. expect the recession to have a further impact on room and occupancy rates throughout 2009, with no reprieve until 2010 ‘at the earliest’. The property agents hope high-spenders attracted to the city by the weak pound will help support the hotel sector’s recovery before the 2012 Olympic Games.