Hotel RevPAR boosted by sports in Q3

The latest Hotel Bulletin shows that room rates, occupancy levels, and RevPAR across the 12 major UK cities in the survey increased in this quarter, and surpassed the results from Q3 2013.

This increase was partly as a result of a number of major sporting events that have been held in several UK cities during Q3.

The top performing cities included Glasgow, Liverpool and Leeds. RevPAR in Glasgow increased by 48 per cent over Q3 as the city hosted the Commonwealth Games, visited by over 600,000 people.

RevPAR in Liverpool increased by 33 per cent compared to the same quarter in 2013, influenced by the Open Championship, held at Royal Liverpool Golf Club in July. Leeds recorded Q3 RevPAR growth of 26 per cent as Yorkshire hosted this year’s Tour de France’s Grand Depart.

London, Birmingham, Cardiff, Manchester, Leeds and Newcastle are predicted to record similar increases in Q3 2015 when they host Rugby World Cup matches.

Supply and pipeline​

The bulletin showed that budget hotels dominated the industry in current supply (33 per cent) and in the active pipeline (50 per cent).

Across the 12 cities in the survey, the average active pipeline was 10 per cent. Aberdeen was shown to have an active pipeline of 16 per cent, and saw occupancy levels fall by seven per cent in the quarter. This suggested a risk of oversupply in the Scottish city.

Notable new openings and developments in the quarter included Accor’s new Ibis hotels in Edinburgh,​ Liverpool’s Titanic Hotel,​ and IHG’s announcement that it plans to open a new 130-bedroom Crowne Plaza​ in London in 2015.

Transactions​

This quarter also saw transaction activity in the sector increase, and £1.4bn worth of transactions were completed. Transaction values for the year have already surpassed those of 2013 and there is still one quarter remaining.

The highest valued acquisition this quarter was for 144 Travelodge hotels, which were purchased by a group of investors for around £520 million.

Partner at Zolfo Cooper Graeme Smith said “We have seen several high value transactions this quarter.

“With transaction values having surpassed that of 2013 and with one quarter remaining we may even see total values comparable to those before the downturn, demonstrating the confidence of investors in the hotel market.”