London hotels taking different route to recovery than provinces

15 April 2010 by
London hotels taking different route to recovery than provinces

London and the provinces are taking very different roads to recovery, according to the UK hotels forecast 2010 and 2011, published by PricewaterhouseCoopers.

The report shows that London is the engine driving UK hotels along the route to recovery with a forecast for the capital that is noticeably more optimistic than in September. London hotels look set to build on the 82.9% occupancy it achieved in the last quarter of 2009 and pull away further from properties outside the capital.

If the growth spurt continues, this should allow hoteliers in London sufficient volume to push up room rates by around 3.5% this year, to give an average room rate of £119.60.

The provinces, however, have seen as bad a revenue decline as they endured in 1992 and are heavily dependent on dwindling corporate and leisure demand. Except for a few regional centres, they remain under pressure to build on falling rates and attract new markets.

Room rates are predicted to start recovering from the second quarter this year outside London, although growth will be marginal. In January the regional market saw a 2,6% occupancy gain, even though rates fell by a further 5.3%

Overall growth of 3% is forecast for UK hotels this year and nearly 5% next year. The report forecasts that London will see a 5.8% revpar growth in 2010 and a further 7.8% growth in 2011.

The forecast for the provinces is a 1.6% revpar growth in 2010 and a further 3.1% in 2011.

"Growth in the UK hotel industry reflects the capital's resilience to the recession. We think the worst is over and London looks set to build on its flourish in late 2009."

Hotels hardest hit by insolvencies in 2009 >>

Will customers still expect discounts post-recession >>

London hotels leading Europe out of recession, says report >>
By Janet Harmer

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