Occupancy up but revenue still down

Hotel occupancy levels rose slightly across the UK in August, which could be a cause for optimism despite average room rate and revenue per available room remaining depressed, according to consultancy PKF.

PKF's figures showed London occupancy rose 0.2% to 79.4% compared with last year, while average room rate dropped by 9.8% to £89.87, leaving revenue per available room (revpar) down 9.5% at £70.44.

The capital saw an increase in European guests, who made up 17.8% of total rooms sold compared with 15.9% in August 2001, although the total number of foreign hotel guests continued to be down on last year. Regional hotels saw a slightly bigger rise in occupancy, up 0.8% to 71.9%. Average daily room rate slipped 2.1% to £57.85, resulting in a 1.3% dip in revpar to £41.62.

Melvin Gold, managing director of PKF's hotel consultancy services, said: "We would expect occupancy to be the first indicator of any changes in the market because occupancy levels must rise before room rate can increase or revpar improve. The increase is likely to be the foundation for a more profitable future."

PKF's survey measures data from more than 550 UK hotels.