Country house hotels lead sales in northern England

Average occupancy levels on the whole have remained stable, and average room rates have increased, which is being reflected in improving profits. However, there are certain cities in the North of England where these prospects are likely to be affected by an increase in the number of new bedrooms, which will significantly add to existing stock levels. These cities include Birmingham, Leeds and Manchester.

Increased revenue from hotel bedrooms has meant that hoteliers are actively exploring the UK market for new opportunities to develop quality hotels.

Despite the slowdown in market activity at its tail end, 2000 was another strong year for UK trading performance. The seven months to July 2000 saw average room occupancy for provincial chain hotels up by 0.1% to 77.5% compared with the corresponding period in 1999. The average room rate for provincial corporate hotels for the same period was also up by 4% to £59.08, compared with 1999.

Statistics for 2000 reveal that the number of publicised transactions in the privately owned quality hotel sector reduced during last year, in contrast to the preceding two years. This appears to be a consequence of improved trading performance experienced by the majority of businesses, creating some reluctance among proprietors to contemplate a sale. And many deals completed over the past 12 months were conducted off-market, without any publicity. Where deals were reported, transactions in the main achieved premium sale prices.

Previous concern over the pound's strength has subsided to allow a return to buoyant trading conditions, with indications pointing to a continuation of this throughout the year.

Predictions of strong trading performance must be tempered a little with the prospect of a general election in May this year. This may give rise to some concern, but regardless of which party forms the government after the general election, we should see confidence return.

By Simon Stevens, Knight Frank hotels department

Next Property watch: 15 March

Source: Caterer & Hotelkeeper magazine, 1-7 March 2001