Questions over 2013 hotel demand grow as December prices drop

By Luke Nicholls

- Last updated on GMT

Related tags: Hotel

UK hotel prices have decreased to an average of £109 a night, with those in London falling by 7 per cent
UK hotel prices have decreased to an average of £109 a night, with those in London falling by 7 per cent
With 2012 marking the UK’s largest room supply increase from new developments in the past decade, PwC believes more new rooms to fill may be difficult in a comparatively ‘empty 2013’. Meanwhile hotel prices have fallen this month, to nearly the lowest point of 2012.

Research by PwC shows that nearly 4,000 new luxury hotel rooms have become available since the successful bid to host the London Olympics was announced in 2005 and the end of this year; that is a 33 per cent increase.

Five-star hotels now account for around 12 per cent of London's rooms (some 14,000 rooms) and there are yet more still to come.

Commenting on the outlook for the London luxury hotel market, Liz Hall, head of hospitality and leisure research at PwC, said: “Looking at recent performance, luxury hoteliers tell us ‘so far so good’. In fact, luxury has outperformed expectations in the 10 months to October and is holding up well, especially given all the extra supply.

Winners & losers

"But it's still hard to feel confident about 2013; there will be winners but a weak economic and travel environment, a fight for market share and more new rooms to fill mean many will feel the hit.

“However, operators are positive about London’s prospects and are encouraged by the global awareness of the capital as a destination and the ongoing improvements in infrastructure.

"With no major events taking place in London in 2013, the question is, where will demand come from? Will it be post games global awareness,  emerging market visitors and the proposed new streamlining of the Chinese visitor process?

"London's luxury hotel sector has a challenge on its hands. But the city is a global gateway with increased global awareness after the 2012 Games and continues to compete well with the other major cities in the world when it comes to top end hotels."

Trivago Hotel Price Index

Meanwhile, the latest findings of the monthly Trivago Hotel Price Index show that UK hotel prices have decreased to an average of £109 a night, based on figures from the 20 most popular UK cities on the hotel bookings website.

Cardiff has decreased by 12 per cent to an average of £81 per night, and London and Glasgow have decreased by 7 per cent to an average of £151 and £73 respectively.

The cheapest UK cities in December are Blackpool and Sheffield, where one night will cost an average of £56 and £67 respectively. The most expensive cities are London and Oxford, where one night will cost an average of £151 and £108 respectively.

Looking back at 2012 as a whole, the most expensive month during 2012 was August, when one night cost an average of £130. The cheapest month was February, when one night cost an average of £104.

London hotel prices predictably peaked during August, to an average of £212 per night - 22 per cent higher than the yearly average of £165.

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