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Hotels fail to capitalise on Olympics during July

20 August 2012 by
Hotels fail to capitalise on Olympics during July

Hotels across the country failed to capitalise on the Olympics during July, as visitors concerned about overcrowding stayed away.

That's according to preliminary figures for the month from PKF Hotel Consultancy Services, which recorded a 0.2% year-on-year decline in rooms yield in London, while rooms yield outside London fell by 1.9%.

The decline in yields in London came about because of a fall in occupancy from 92.1% for July 2011, to 78.4% last month. Although room rates actually rose by 17.3% to £177.68 (compared with £151.43 a year ago), it was not enough to prevent a drop in yields.

Meanwhile, outside the capital there was a 4% increase in room rates from £55.95 to £58.20, which was more than offset by a 5.7% drop in occupancy to 75.9%, compared with 80.4% in July 2011. Rooms yield therefore dropped to £44.15 from £45.01 a year ago.

Robert Barnard, partner for Hotel Consultancy Services at PKF, said: "We're not seeing much evidence of an Olympic-inspired uplift from the data just yet. But these are still impressive results - occupancy of between 75% and 80% across the UK as a whole is very respectable.

"The room rate increases imposed by some operators will undoubtedly have had an impact on occupancy. However, I suspect that the main drag on performance, particularly in the capital, was the anticipation of problems with transport, overcrowding and high prices before the Games opened at the end of the month.

"We now know that many of these concerns turned out to be unfounded, which is something that the sector will be keen to promote. However, many operators remain understandably cautious about the two-and-a-half week ‘shoulder' period between the end of the Olympics and the start of the Paralympics, so the August results may turn out to be subdued as well.

"We've seen the country's reputation boosted by what have been widely recognised as among the best Olympics in recent history, so I'm confident that the hotel sector will eventually enjoy the benefits of the Games - although probably not until after the last athletes have boarded their planes home."

By Neil Gerrard

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