Regional hotels continue to outperform London venues as discounting impacts the capital

By Peter Ruddick

- Last updated on GMT

Related tags: Hotel, London

Hotels in the capital underperformed in comparison with their regional counterparts in April as London venues suffered from a round of discounting
Hotels in the capital underperformed in comparison with their regional counterparts in April as London venues suffered from a round of discounting
Regional hotels outperformed their London counterparts once again in April with discounting leading to drops in average room rate and revenue per available room (RevPAR).

According to statistics released by both business advisory and accountancy firm BDO and hospitality intelligence company HotStats, London hotels recorded a drop in RevPAR during April while hotels in the provinces enjoyed increased occupancy, greater average room rates and a higher RevPAR figure.

London capacity

BDO's preliminary hotel figures showed hotels outside the capital posted a 5.7 per cent rise in RevPAR while those in London recorded a drop in RevPAR of 8.6 per cent.

In fact the drop was so large for London hotels that the monthly revenue per available room (RevPAR) figure dropped under £100 - it fell to £95.45, down from £104.46 in April 2012.

Robert Barnard, partner at BDO, blamed the poor capital performance on a round of discounting by London hoteliers in order to deal with the increased bedroom capacity created by last year's Olympic Games. 

“The figures for London look disappointing but need to be put into context," said Barnard. "April 2012 was a particularly strong month for the capital’s hoteliers - rooms yield increased by 7.8% this time last year - and was therefore always going to be a tough act to follow."

The HotStats figures also made for positive reading for London hotels despite drops in occupancy and RevPAR - London hotels in the HotStats survey saw the first month of gross operating profit growth in April after three months of consecutive profit decreases. 

Regional success

Hotels in the regions continue to outperform their London counterparts - BDO reported a slight increase in average room rate (up 0.1 per cent to £54.71).

However both HotStats' UK Chain Hotels Market Review and the BDO survey agreed that occupancy in the provinces surged in April from the same month a year ago - up 3.4 per cent and 5.6 per cent respectively. 

“This is another stellar performance from regional operators," Barnard said. "Make no mistake: the operating environment remains challenging for much of the sector, so hoteliers in the regions deserve credit for consistently delivering year-on-year top line growth.

"Looking ahead, London will be hoping to benefit from the Champions League final, which was played at Wembley for the first time since 2011, and from the gradual uptick in consumer and business confidence that we have started to see recently," he added.

UK Hotels - April 2013 Performance

BDO

London 

  • Occupancy - 82.5 per cent, down 1.7 per cent
  • Average room rate - £155.77, down 7 per cent
  • RevPAR - £95.45, down 8.6 per cent

Provinces

  • Occupancy - 73.1 per cent, up 5.6 per cent
  • Average room rate - £54.71, up 0.1 per cent
  • RevPAR - £39.96, up 5.7 per cent

HotStats

London 

  • Occupancy - 81.1 per cent, down 0.2 per cent
  • Average room rate - £135.29, unchanged
  • RevPAR - £109.79, down 0.2 per cent

Provinces

  • Occupancy - 71.5 per cent, up 3.4 per cent
  • Average room rate - £68.27, up 2.2 per cent
  • RevPAR - £48.80, up 7.3 per cent

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