Buoyant London hotel market puts brake on sales
The London hotel market has registered a record 13.3% growth in room yield during the first six months of 2000 compared with the same period in 1999.
Average room yield from January to June was £181.51 and July saw a 24% increase, which industry experts are attributing to an increase in visitors from the Middle East.
"The Middle Eastern segment drives abnormally high room rates with guests staying in luxury properties for long periods of time," said Arthur de Haast, managing director, Europe, at Jones Lang LaSalle Hotels, which produced the statistics.
But the buoyant market has led to a freeze in sales of hotel properties, with the only major sales in the capital being the Howard Hotel for £40m and the De Vere Gardens for £25m.
This, according to de Haast, is more the result of a lack of quality stock for sale than lack of investor interest.
Major European operators such as Sol Meliá, Hilton, Bass and Accor are keen to expand their presence in London, but they want corporate deals.
"There is currently a buyer/seller mismatch in the market that has curbed investment activity and the major operators are likely to avoid single asset investments unless they offer a distinct advantage to the group as a whole."
While London is growing, UK regional markets are under-performing, with Cardiff recording an 8% decrease in room yield during the six months to June and both Birmingham and Edinburgh remaining static.
by Andrew Davies andrew.davies@rbi.co.uk
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