February room rates show dip

UK hotels' performance in both London and the regions faltered slightly in February, according to preliminary figures from consultant PKF published last week.

Occupancy rates held up fairly well, with a year-on-year drop of just 0.2% in regional hotels and 3.1% in London, the smallest fall since February 2001.

But room rates dropped by 1.9% in the provinces and 11.5% in London.

Room yields in London dropped by 14.2% on 2001 figures to £82.98 and by 2% in the regions to £44.18. In January the corresponding drops were 13.9% and 0.2%.

The capital's reliance on the domestic market was increasingly apparent. In February, the proportion of UK hotel visitors rose by 20.2%, while US visitors dropped by 13.2% and European visitors by 2%.

Melvin Gold, managing director of hotel consultancy services at PKF, said: "The February results are slightly surprising as we had expected that the slow but gradual recovery would continue. It is encouraging that occupancy rates are holding up reasonably well but there has definitely been a pause for breath on the room rates front.

"We anticipate the positive forecasts on the UK economy will hasten the return of the more lucrative business segment of the hotels market, and that foreign visitors will become increasingly more numerous, enabling hoteliers to improve room rate performance.

"The early Easter holiday may also have helped to kick-start the traditional holiday season."

by David Shrimpton