Occupancy growth is grounds for optimism

The much-anticipated recovery in the hotels sector moved a step closer in September, with consultants PKF recording a significant increase in hotel occupancy levels. In its latest report, PKF said the UK hotel market had seen the highest September occupancy levels since 2000.

In London, September occupancy rates rose 3.3% to 82.2% and average room rates moved up 0.3% to £95.74, pushing revenue per available room (revpar) up 3.6% to £78.69. Hoteliers in the capital noted a particular increase in European business, with US and domestic business also improving.

In the provinces, occupancy was up 2.4% to 78%, although the average room rate slipped by 0.7% to £63.39. Revpar increased by 1.6% to £49.42.

Melvin Gold, managing director for hotel consultancy services at PKF, said the "encouraging" figures provided further evidence of the sector's slow recovery.

Although room rates remain under pressure, Gold said he expected to see the increasing confidence in the market begin to affect price-setting for 2004.