Hotel operators in London experienced a "year of two halves" in 2008, according to a study by consultancy Deloitte.
Up until August, London hotels reported strong revenue per available room (revpar) growth of 7.2%. Although occupancy had seen a slight fall, it was still strong at 80.7%. Average room rates were the main driver, rising 7.4% to £132.
However, as the global economic crisis unfolded, it was only a matter of time before hoteliers would start to feel the effects.
In September, revpar saw a 5.4% fall, as occupancy tumbled and although October fared slightly better it too saw revpar decline 3.8% compared to last year.
November daily results from STR Global showed that revpar in the capital followed this trend, falling 8.0% to £102. Occupancy fell 4.7% to less than 80% while average room rates saw a 3.5% decline to £128. December results have followed suit, with early figures showing that revpar was down 4.5% during the first two weeks.
The final quarter will no doubt be the weakest of the year, but with the strong performance witnessed during the first eight months of the year, year-end 2008 results should remain in positive territory for the capital, the study revealed.
Marvin Rust, hospitality managing partner at Deloitte, said: "The first part of 2008 was strong for hotels across the UK, particularly in the capital, and hoteliers should be proud of what they have achieved in a tough operating climate.
"Although the last quarter results are inevitably going to be weak given the current economic environment, year-end results are expected to remain in positive territory."
By Daniel Thomas
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