Provincial hotels beat London in profit gains and occupancy

Profit levels in UK hotels jumped by more than 9% last year, but the biggest growth came from hotels outside the capital, according to a new survey.

Provincial hotels saw profits rise by 10.2% compared with 1997, while London hotels recorded profit levels up by 7.4% on the previous year.

The survey of 262 chain-operated hotels carried out by BDO Hospitality Consulting showed that the profits gains were set against a 2% drop in occupancy in London to 79.9% and a 0.7% rise in the provinces to 71.9%.

London hotels increased average room rates by 6.4% to £79.18 while room revenue yield was up by 3.8% to £63.30. In the provinces average room rate was £58.23, an increase of 7%, with yield showing an 8% jump to £41.84.

Jonathan Langston, joint managing director of BDO, said that the UK hotel industry has seen record levels of profitability over the last three years and predicted more growth for hotels this year.

"We still see opportunities for growth in 1999 with the likelihood of recession fading, falling interest rates and forecast increases in tourist arrivals," he said.