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Growth in revpar discrepancy between London and regions

03 May 2019 by
Growth in revpar discrepancy between London and regions

The first three months of 2019 saw a polarisation in performance between London and regional hotels, with revenue per available room (revpar) up by 4% and down by 3% respectively.

It is the first time revpar in the regions has declined in the first quarter since 2012, according to the UK Hotel Market Tracker: Q1 compiled by AlixPartners, HVS London and STR.

Revpar in London was £103.42 and £44.04 in the regions. Meanwhile, occupancy in the capital climbed by 1.7% to 77% and average room rates rose 1.9% to £134.05, while outside London occupancy dropped 0.7% to £64.95 and average room rate fell by 2.1% to £65.95.

Russell Kett, chairman of HVS, said: "London's performance in the early months of 2019 was helped by the Six Nations rugby tournament and Passenger Terminal Expo at Excel."

"Conversely outside London hotel performance was adversely affected by supply growth causing hotels to discount more aggressively in many locations. Ultimately this new supply should be absorbed but the effects of Brexit are also to blame for this."

The tracker predicts that further cost increases during the rest of the year and ongoing capex requirements will be challenging for hoteliers and investors, particularly in the regions.

Surge in hotel room supply to check growth >>

Occupancy gulf between London and regional hotels widens >>

Economic uncertainty and new openings to slow performance of UK hotels >>

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