UK hotel performance improved, but future uncertain

Hotel Britain 2011, which reviews the performance of 549 hotels throughout the UK, found that room occupancy levels increased by almost 3 per cent to reach 74.5 per cent in 2010.

Overall performance of the UK hotel market continues to be boosted by a strong capital, with London hotels recording an occupancy of 82.6 per cent, an increased of 1.6 per cent on last year. In contrast, occupancy levels in regional hotels increased by 3.1 per cent to 70.5 per cent.

London​ drives performance​

Robert Barnard, hotel consultancy services partner at PKF, said: “In the first half of the year, London benefited from the weak pound which encouraged overseas visitors to the UK and boosted a demand for accommodation in the capital.

This led to room yields increasing by 12.5 per cent on 2009 to £119.12 – the highest they have been for the five year period under review. And during the second half of 2010, the biennial Farnborough Air Show and a pick up in corporate and event business resulted in London posting an average of 92 per cent occupancy for the month of July.”

However, performance in the regions has remained more challenging, primarily due to less business travel and low accommodation budgets.

“This particularly impacted the meetings, incentives, conference and events (MICE) market; although there were signs towards the end of the year that the situation was changing with a zest for meetings and events in regional hotels returning,” said Barnard.

Overall, room yields in UK hotels rose by 7.6 per cent in 2010 to reach £72.20.

Looking ahead​

Despite the improvement in performance last year, Hotel Britain 2011 predicts that the future remains uncertain for UK hotels.

Global factors that will likely impact the market’s performance include increasing oil prices, economic and financial scepticism, and events in the Middle East, North Africa and Japan.

“The road ahead for the UK hotel market remains stubbornly turbulent and will continue to be impacted by broader worldwide issues,” said Barnard.

“We expect London to remain stable with some anticipation of growth especially as it benefits from the build up to the Olympic Games, the Royal Wedding and the Champions League Final.

“The recovery of the performance in the regions will, however, continue to be slow and dependent on growth in the MICE and corporate markets.”