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Hotels results for July provide cautious optimism for future

27 August 2013 by
Hotels results for July provide cautious optimism for future

One year on from the London 2012 Olympics, the global sporting event is the explanation behind the tumbling room and revenue rates for July.

However, two sets of figures released today - by HotStats and accountancy firm BDO - both confirm that the falling figures was offset by a rise in occupancy figures, providing cautious optimism across the industry.

In London, the survey confirms a drop of 5.2% to £130.59 in revenue per available per room (revpar), while the statistics from BDO, taken from a group of predominately chain hotels in the three-to-four categories, reflect a similar 5% fall. However, a different selection of hotels surveyed by BDO's resulted in a lower yield figure of £120.36.

Meanwhile, the occupancy in London increased by 10% to 87.1% according to BDO, and a similar 87.9% (up by 7.1 percentage points) in the HotStats survey.

Figures for the regions from HotStats showed that the Olympics had less of an impact on hotel performance with gross operating profit per available room in July rising for the fourth consecutive month - largely due to the positive effect of the hot weather. Occupancy and average room rate increased by 3.5 percentage points to 80.3% and by 0.4% to £71.78 respectively, compared to the same month last year, with rev par growing by 4.9%.

The BDO figures show a 1.4% year-on-year reduction in room rate to £59.09, alongside an occupancy increase from 75.3% to 80.4%.

Robert Barnard, partner at BDO, said that the latest figures indicate another strong performance from regional operators, which show no signs of slowing down.

"I'd caution against reading too much into the drop in rooms yield in London, because the comparison is against the month in which the city began hosting the Olympics. The fact that occupancy is almost 90% is a better indicator of the capital's current strength," he explained.

"Looking behind the numbers, the UK hotel sector appears to be in good shape to take advantage of the nascent economic recovery.

"The sector's fundamentals are strong. Some 12 months on from the Olympics, London's position as a world class business and leisure destination is stronger than ever. Outside the capital, the lack of new development in recent years has helped operators to manage room rate and occupancy during periods of softening demand.

"It's important not to get carried away, but the sector has reason to be increasingly optimistic about its future prospects."

London hotels outperform regional hotels in June >>

Strong June results for London hotels, boosted by comparison to last year's pre-Olympic slump >>

TagsTrends and Hotels
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