Rising room rates show confidence

The recovery in the UK hotels sector gathered pace in October as room rate and occupancy levels improved in both regional and London hotels, according to figures from consultants PKF.

In London "a small upturn" in European and US business combined with strong domestic business boosted occupancy rise 5.1% to 82.3%, compared with the same period last year, while average room rate increased by 0.2% to £99.98. Revenue per available room (revpar) rose 5.3% to £82.29.

Outside London revpar rose by 1.9% to £47.83, with average room rate up 1.6% at £63.71 and occupancy rising by 0.3% to 75.1%.

"We've believed for some time that things are going in this direction, but this is the first time this year where all the figures are positive year-on-year," said Melvin Gold, managing director for hotel consultancy services at PKF.

Gold said the stronger room rates could reflect increased confidence from hoteliers and predicted that 2004 would be the best year for the sector since 2000. However, he cautioned that 2004 levels would still be well short of 2000 ones and external factors such as terrorist attacks, interest rate rises and the weak dollar could affect growth rates.