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London hotels outperform regional hotels in June

18 July 2013 by
London hotels outperform regional hotels in June

Careful revenue management has helped London hotels outperform their regional counterparts for only the second time this year, according to preliminary hotel figures for June released by business advisory and accountancy firm, BDO.

A 2% year-on-year reduction in room rate in the capital to £143.79, compared with £146.75 in June 2012, was more than offset by a 6.3% increase in occupancy from 82.6% to 87.9%. As a result, room yield rose 4.2% from £121.33 to £126.36.

In the regions, room rate remained unchanged at £62.77, while occupancy improved by 2.4% from 74.9% to 76.8%. Rooms yield consequently rose by 2.4% to £48.21, compared with £47.07 12 months ago.

Meanwhile, regional hotels posted the strongest performance for the first six months of the year as whole. Comparing January to June 2013 with the same period last year, rooms yield increased by 2% in the regions, but fell by 2.7% in the capital.

Robert Barnard, partner at BDO, said: "This is a strong performance all around, especially in London. Operators are skilfully using selective price discounting to contribute to top line growth at a time when the operating environment is beginning to show signs of improvement.

"Regional hotels will be particularly pleased with their results for the first half of the year. A combination of strong management and lack of new hotel openings has enabled operators in the regions to buck the trend we've seen in recent years and outperform their London counterparts.

"To have achieved this at a time when the MICE [meetings, incentives, conferences and exhibitions] market remains in the doldrums is all the more impressive.

Barnard added that he expects regional hotels to remain in the black for the rest of the year, provided that consumer and business confidence continues to grow.

"London's performance may suffer from unfavourable comparisons with last year's Olympics-inspired success, but the city's fundamentals are likely to remain sound for the remainder of 2013," he said.

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