The Olympic Games could turn 2012 into a record year for hotels in London and the regions, according to accountants PricewaterhouseCoopers (PwC).
Liz Hall, head of hospitality and leisure research at PwC, said she expected growth in revenue per available room (revpar) of 2.8% across hotels in the capital this year.
“Hotels should see a positive impact on occupancy of almost 1.2% in London and 0.9% in the regions, taking occupancy to almost 84% in London and 72% outside the capital,” she said. “If achieved it would be the highest annual occupancy seen in London since the 1970s and the highest ever in the regions.
“All eyes will be on London this summer as the Queen’s Diamond Jubilee and the London 2012 Games attract the world’s interest. And without the boost in the third quarter of the year from the games, London hotels would have been looking at a poor year, with the impact of the harder trading environment being felt more keenly.
“For London in Q3 we expect occupancy to hit almost 92% and with rates at £156 pushing revpar to almost £144, a growth rate of over 21% over Q3 2011. Many operators expect trading to remain flat in London at best outside Q3 and we continue to forecast slight revpar declines in Q2 and Q4.”
Meanwhile, figures for March released today by PKF Hotel Consultancy Services confirm that the London hotel sector is shaping up for a strong year.
Rooms yield in the capital grew by 5.5% to £105.26 from £99.73 in March 2011. This was driven by a 7.6% rise in room rate to £131.93, compared with £122.65 a year earlier, which more than offset a 1.9% decline in occupancy from 81.3% to 79.7%.
In the regions, a 3.1% rise in occupancy from 66.8% to 68.9% resulted in a 1.5% increase in rooms yield to £41.52, compared with £40.89 12 months ago. Room rate fell by 1.5% over the period, from £61.19 in March 2011 to £60.28.
Robert Barnard, partner for Hotel Consultancy Services at PKF, said: “The sector will be glad to see the back of an especially tricky winter season and I’m sure that hoteliers across the country will be crossing their fingers hoping that these figures are the start of a more positive longer-term trend.
“Looking ahead, the capital’s hotels are ideally placed to benefit from what could become a golden summer, with the Olympics now just 100 days away and the growing excitement surrounding the Jubilee celebrations.
“Regional hotels deserve credit for posting rooms yield growth in March. The market outside London remains tough but these figures provide some grounds for optimism for the future.”
By Janet Harmer
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