Deloitte forecasts slower growth for 2005

07 February 2005 by
Deloitte forecasts slower growth for 2005

London hotels will continue to experience growth this year, but probably not at the same rate as last year, according to the latest figures from consultancy Deloitte.

The company's latest HotelBenchmark survey confirmed that last year was a year of recovery for London hotels after the ravages of 2003.

Revenue per available room (revpar) rose by £8 to £78 during 2004, a 12% rise on the previous year.

Occupancy was also heading in the right direction, up 3.5 percentage points to 77%, and the average room rate was up £5 to £101.

But for 2005 revpar growth was expected to slow to 4.1%, mostly because of a slowing down in the world economy and the impact of rising oil prices.

Marvin Rust, hospitality partner at Deloitte, said: "To repeat last year's performance, hoteliers will need to manage their customer and distribution channel mix carefully to replace low-margin business with more profitable lines.

"Now that the London hotel market's occupancy levels are approaching 80%, further growth will become increasingly challenging," he added.

Strong growth in the capital came from hotels catering for the corporate traveller/business conference end of the market, which recorded a 15% increase in revpar.

Outside London, Newcastle took Cardiff's crown as the top-performing regional city, with a jump in revpar of 12%, Deloitte said. This was driven primarily by a £4 increase in the average room rate to £61.

London's airport hotels had also performed strongly, with Gatwick recording a 15% increase in revpar and occupancy topping 80%.

Heathrow saw occupancy rise by 6%.

by Nic Paton

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