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Demand for UK hotels grew in 2011 and slight revpar increase forecast for 2012

02 February 2012 by

Demand for hotel rooms in London and the majority of UK destinations grew last year, despite the challenging economy, according to data from STR Global.

Meanwhile, revenue per available rooms (revpar) is forecast to increase slightly in both the capital and the regions this year.

"Overall 2011 was a good year for UK hoteliers, thanks to positive demand growth," said Elizabeth Randall, managing director at STR Global. "However, to reflect the uncertainty in the economy, our latest forecast for 2012 was downgraded, expecting revpar growth in London to reach 1.9% and 0.6% across regional UK."

London saw revpar increase by 8.4% in 2011. Growth benefited across all segments from increasing average daily rate (ADR) between 5.7% (midscale and economy) and 10.4% (upscale and upper midscale). The Royal Wedding week in April 2011 saw revpar decline by 19.4%.

Regional UK revpar increased by 1.5% in 2011, resulting from improving occupancy, which increased modestly across all markets. ADR in luxury and upper midscale hotels grew by 1.2%, while midscale and economy hotels climbed by 3.5%. The economy and midscale class was the only segment in 2011 experiencing ADR decline (-2.1%).

In regional cities, revpar growth was the result of mixed increases between rate and occupancy. Among the best performers in 2011, Reading and Harrogate reported growth in occupancy (7.65% and 6% respectively), compared with the previous year. Oxford and Brighton achieved the highest ADR increases of 4.9% and 4.6% respectively.

Across the regions, the highest occupancy was achieved at Heathrow Airport (82.7%) followed by Edinburgh and York, both reaching 80.1%. Bath, which reported the highest ADR in 2010, ended 2011 with the highest ADR outside London at £87.33. Preston and Hull, on the other hand, saw double-digit revpar declines. In Preston, the decline was led by a 10% growth in bedroom supply, whereas Hull's revpar was led by a declining ADR of 9% to £44.84.

STR Global's annual report assessed data from 2,700 hotels in 51 cities across the UK.

Tough year ahead for regional hotels >>

European hotel occupancies and room rates increase for 11 months in 2011 >>

London hotels boosted revPAR by 12% in 2010 >>

By Janet Harmer

E-mail your comments to Janet Harmer here.

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