The hotel sector continued to improve in the third quarter of 2010, thanks in part to the return of the business traveller.
That's the news from the latest research by financial services firm PricewaterhouseCoopers (PwC) which saw a better-than-expected improvement in both London and the provinces.
Robert Milburn, UK leader for hospitality & leisure at PwC, said: "Current trading suggests this trend will continue into October, as the business travel rebound gathers pace and exchange rates continue to support international travel. This underpins our expectations that we remain on track to meet or exceed our latest forecast for 2010, which in London is for around 9% revpar growth.
"London's dynamic hotel scene continues to bask in the glory of a sprightly recovery. It has been the engine driving UK hotels along the route to recovery and those we speak to expect London to keep up the pace."
Liz Hall, head of hotels research at PwC, added: "The provinces also continued to fight back in September, and although "average" masks a mixed performance with winners and losers across much of the UK, the month saw more cities improve their performance and some international centres such as Edinburgh mimicking London's strong growth. We anticipate that the provinces should also meet or exceed our expectations with a revpar gain of 1.6% this year.
"In terms of risks, worries around public sector cutbacks raise concerns whether the cuts could undermine economic recovery and hence the upturn in business travel, meetings and conference bookings."
But the extra boost to the 2010 figures could translate into more subdued growth in 2011, PwC said. However, it still anticipated around 9% revpar growth again in 2011 for London and 3% in the provinces.
Milburn concluded: "There are risks, of course, not least the economic uncertainty and London supply concerns, but it has been a remarkable growth story in 2010. And this continued growth, albeit at a slower rate, is expected in 2011, led by London as well as key provincial cities whose growth in many ways mimics London."
By Neil Gerrard
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