Recovery at London hotels unlikely to bring predicted bonanza

27 October 2005
Recovery at London hotels unlikely to bring predicted bonanza

London hotels bounced back in September from the poor summer trading sparked by the July bombings, according to the latest HotStats survey.

But a new report from Tri Hospitality warns that despite the resilience shown by the capital's hotels, they are unlikely to reap the rewards predicted at the start of the year.

London revenue per available room (revpar) in September was largely static, rising just 0.1% to £77.31. However, this was a big improvement on August when revpar slumped by 9% year-on-year.

Tri blamed the flat sales at London hotels on falling occupancy levels, which dropped by 3.7 percentage points to 81.9%. Room rates, however, grew by 4.7% to £94.39.

"We are still down on where we expected to be at this point in the year but if this recovery gains momentum at least some of this lost ground can be made up," said Jonathan Langston, managing director of Tri.

Provincial hotels enjoyed a more prosperous September and boosted revpar by 4.1% to £55.48 on the back of a 3.3% rise in room rate to £70.65. Occupancy, however, grew by just 0.6 percentage points to 78.5%.

"The provinces have been close to their historic peaks for occupancy so it is to be expected that rate is where gains are made," said Langston. "While provincial hotels are set to have a reasonable year, it now seems unlikely that hoteliers in the capital will enjoy the bonanza expected at the beginning of the year."

For the year to September, revpar has grown by just 1.8% to £70.52 in London hotels, driven by a 3.5% rise in room rate to £89.14. Occupancy to date is down by 1.3 percentage points to 79.1%.

In the regions, only occupancy has fallen over the year by a minute 0.4% points to 71.2%. Revpar has grown by 3% to £47.97 thanks to a 3.6% boost in average room rates to £67.38.

By Angela Frewin

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