London's hoteliers celebrate a profitable May

By Peter Ruddick

- Last updated on GMT

Related tags: Average room rate, Hotel

Profitable London: The capital's hoteliers enjoyed a successful May with profit growth driven by increases in revenue per available room (RevPAR)
Profitable London: The capital's hoteliers enjoyed a successful May with profit growth driven by increases in revenue per available room (RevPAR)
London hotels enjoyed a second consecutive month of profit growth in May, driven by an increase in revenue per available room (RevPAR), but their regional counterparts also had a successful month, according to two new reports.

According to the HotStats survey of around 625 full-service UK chain hotels, the capital's hotels saw improvement in all three key performance indicators last month. RevPAR grew by 2.6 per cent to reach £127.20, while occupancy (85.1 per cent) and average room rate (£149.51) were also up on May 2012.

Profitable London

HotStats, which is no longer associated with TRI Hospitality Consulting in the UK, said the success in May could be attributed to F&B and leisure room bookings as opposed to meetings business which actually suffered during the month.

Rising utility costs and food inflation is continuing to impact the ability for businesses to convert sales into profits but profit conversion actually improved in May.

The good news for London hoteliers is matched in BDO's hotel trends survey of mainly three and four-star independent hotels.

According to BDO average room rate dropped slightly last month but the consultancy firm is reporting a 1.9 per cent growth in occupancy and a 1.0 per cent jump in RevPAR.

Robert Barnard, a partner at BDO, said: “"It is encouraging to see operators across the country posting year-on-year growth in rooms yield. Hotels in London in particular will be relieved that they are back in the black after several difficult months."

Resilient regions

While London's hotels may have been celebrating a recent upturn in fortunes, provincial venues were enjoying yet another month of improvement.

BDO reported a big growth in occupancy (up 4.1 per cent to 75.7 per cent) which more than cancelled out a drop in average room rate to result in a 2.3 per cent growth in RevPAR.

According to HotStats, occupancy and average room rate were both up by 1.0 per cent, helping to deliver regional RevPAR growth of 2.4 per cent in May.

Edinburgh was one of the big success stories from the survey - increased revenues from restaurants, bars, conferences and banqueting helped push up F&B profits per available room by 14.1 per cent. 

BDO's Robert Barnard said the month's figures showed hoteliers were continuing to defy wider economic trends: "The market remains challenging but the sector is, as always, putting up a strong fight.

Hotels are being canny and using a wide range of tactics, including selective price discounting, to reinforce revenues at a time when the economy is only just starting to show signs of improvement," he added.

UK Hotels - May 2013 Performance

BDO

London 

  • Occupancy - 85.2 per cent, up 1.9 per cent
  • Average room rate - £136.27, down 0.9 per cent
  • RevPAR - £116.12, up 1.0 per cent

Provinces

  • Occupancy - 75.7 per cent, up 4.1 per cent
  • Average room rate - £60.32, down 1.7 per cent
  • RevPAR - £45.67, up 2.3 per cent

HotStats

London 

  • Occupancy - 85.1 per cent, up 1.2 per cent
  • Average room rate - £149.51, up 1.1 per cent
  • RevPAR - £127.20, up 2.6 per cent

Provinces

  • Occupancy - 74.4 per cent, up 1.0 per cent
  • Average room rate - £70.47, up 1.0 per cent
  • RevPAR - £52.40, up 2.4 per cent

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