The Caterer
Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

Falling corporate room rates squeeze profits in the regions

25 March 2010 by

Although the thaw in January's freezing weather brought some recovery to provincial hotels in February, pressure on average room rates continued to stymie growth in profitability, according to the latest HotStats report from Tri Hospitality Consulting.

Gross operating profit per available room (goppar) fell by 0.4% in the regions to £22.06 (2009:£22.15) - a marked improvement on the 18.9% slump reported in January.

Although occupancy in the regions rose by 2.7 percentage points (to 66.9%), average room rates slipped by 4.7% to £66.58, building on the 6.2% decline noted in February 2009.

Corporate rates have come under the greatest pressure, falling by 7% to £67.02 in February compared with a 4.1% decline in the same month of 2009. The cities hardest hit by this drop were Birmingham (where corporate rates slumped by 11.8%), Manchester (-9.4%) and Leeds (-7.5%).

"Despite the increase in room occupancy levels, the challenge for provincial hoteliers remains in securing high-yielding contracted businerss to bolster rooms revenue," said Jonathan Langston, managing director at TRI.

"It appears that business travel bookers are once again using the uncertainty of the economic climate to their advantage during rate negotiations as they drive prices further down."

The decline in corporate rates has also hit London hotels to a lesser extent.

The capital's hotels achieved double-digit growth in goppar for the third month in the row, raising profitability by 12.4% to £53.71 (2009: £47.77).

This growth stemmed from a 3.5 percentage point rise in occupancy (to 77.6%) and a 3.1% hike in average room rate to £114.14.

However, corporate rates declined by 2.2%, despite a 3.6% rise in demand from this sector. By contrast, conference rates increased by 6.5% despite a marginal (0/3%) rise in demand.

TRI HotStats: monthly UK hotel figures >>

PKF monthly hotel performance update >>

UK hotel revpar forecast to grow by 3% in 2010 >>

E-mail your comments to Angela Frewin here.

If you have something to say on this story or anything else join the debate at Table Talk - Caterer's new networking forum. Go to www.caterersearch.com/tabletalk

Caterersearch.com jobs
Looking for a new job? Find your next hote job here with Caterersearch.com jobs

Blogs on Caterersearch.com](http://www.caterersearch.com/blogs) Catch up with more news and gossip on all Caterer's blogs
[Newsletters For the latest hospitality news, sign up for our e-mail newsletters.
TagsTrends and Hotels
The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.

close

Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking