The decline in demand for London hotels during the Olympics was not a result of a drop in corporate business as predicted, according to the latest HotStats survey from TRI Hospitality Consulting.
Instead, the 10.2% fall in room occupancy to 81.6% in July was largely because of a drop in demand from the leisure and tour group sectors. This may partly have been down to the high visitor numbers in July 2011, combined with the timing of Ramadan and the shift towards high-yielding Olympic business and away from group bookings.
While average room rate in the capital in July increased 6.3% year-on-year to £159.26, revenue per available room (revpar) fell 5.5% to £171.16 as a result of the decline in occupancy.
Managing director of TRI Jonathan Langston said that London was typical of many previous Olympic and World Cup host cities which have rarely benefited during the period of the event.
"It is important for London hoteliers to put July's performance into context rather than licking their wounds, as most other cities across the UK and Europe would consider a room occupancy close to 82% and 6.3% increase in room rate to be a hugely successful month."
There were mixed blessings for the regional cities which hosted Olympics events. Cardiff, which held the first event of the games with a women's football match at the city's Millennium Stadium, achieved a 6.6% boost to occupancy and 6.5% increase in average room rate, contributing to a 13.8% rise in revpar. As a result of astute cost management, the city was able to achieve a year-on-year increase in profit per room of more than 45% to £34.54.
Positive profit performance was also achieved in other cities hosting Olympic football matches, including Glasgow (+4.4%), Coventry (+4.1%) and Newcastle (+16.7%). However, the games at Old Trafford had little impact on overall performance levels in Manchester, with a 3.6% decline in occupancy to 76.2% and a 5.3% increase in average room rate to £78.62, resulting in only a slight increase in revpar.
Overall, the provincial hotel market ended the month with a 2.2% increase in revpar and 3.3% in average room rate to £72.23.
By Janet Harmer
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