July results give a glimmer of hope for slow recovery

UK hotels recorded a flat performance in July, according to figures from consultancy firm PKF. But it believes the results could indicate an upturn for the second half of the year.

Melvin Gold, managing director of hotel consultancy services at PKF, said: "The flat performance of the hotel market during July would, in other years, be worrying. But after months of bad news, this could herald the start of the market's recovery.

"There is a real chance that the remainder of 2002 will see a gradual upturn, leading to more favourable conditions in 2003. But it remains difficult to predict with any certainty."

In July occupancy levels in London slipped by 0.2 percentage points, from 82.9% last year to 82.7%, while room rates edged up by 0.2%, from £109.47 to £109.71.

This meant that, despite the worst occupancy levels in July for eight years, rooms yield in London dropped by only 0.1% throughout the month, from £90.80 to £90.68.

The number of foreign guests in the capital fell, but hotels were boosted by an increase in the number of domestic visitors. They represented 37.8% of the total, up from 33.7% in July last year.

In the regions, hotels saw occupancy levels climb by 0.2 percentage points, from 75.4% to 75.6%, while room rates nudged up by 0.1% to £63.15, from £63.09. Rooms yield climbed by 0.3%, from £47.59 to £47.73.

Gold concluded: "Overall, we believe we are seeing the market back on the first rung of the ladder to recovery.

"It will be interesting to see just how far the market moves forward in the coming months compared with the extremely unusual latter part of 2001 in the wake of UK economic problems and 11 September."

by Louise Bozec