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Royal Wedding was disappointing for London hotels

27 May 2011 by
Royal Wedding was disappointing for London hotels

The Royal Wedding was a disappointment for London's hotels, according to the latest HotStats survey from TRI Hospitality Consulting.

Profit levels for the capital's hotel rooms soared during April, but not because of the royal nuptials.

Despite the boost in number of visitors to the capital to celebrate the wedding of Prince William and Kate Middleton, the HotStats survey shows that the demand for full-service hotels during this period was not as strong as anticipated.

Room occupancy levels dropped to around 60% on the day of the wedding (29 April). The previous Easter weekend was also poor for business, with year-on-year occupancy levels dropping by 26% to 46%.

The 12.5% growth in profit per room to £57.01 in April was attributed to strong year-on-year performance levels at the beginning of the month, as well as a recovery from the declines in occupancy and average room rate suffered in April 2010 as the Icelandic ash cloud closed UK airspace for several days.

"It was widely anticipated that the Royal Wedding would cause a significant boost to headline performance levels for London hoteliers in April," said Jonathan Langston, managing director of Tri Hospitality Consulting.

"However, whether it was due to high pricing in the full-service market or a higher-than-forecast proportion of day-trippers, it is clear the expected demand did not materialise."

The two bank holiday weekends in April resulted in provincial hotels, which rely heavily on corporate demand, suffering a 5.2% decline in profit, from £22.39 to £21.22 per room. While there was an increase in demand from leisure, it was at the expense of average room rate.

Profit levels, however, did increase in typical leisure destinations such as Brighton (+55.3%) and Edinburgh (+24.5%) and Bath (+2.8%). The impact of a drop in commercial activity was felt more acutely in business-led hotel markets such as Coventry (-15.5%), Newcastle (-11.3%) and Swindon (-10.1%).

"A significant number of key provincial hotel markets rely heavily on commercial activity to drive demand for accommodation and the timing of these bank holidays has only further exacerbated the tough trading conditions for provincial hoteliers, said Langston. "Our hope would be for hoteliers in the provinces to have a strong operating period in May and June before the summer holidays begin in earnest."

The HotStats figures are based on a survey of 551 hotels across the UK, with an average bedroom stock of 182.

Royal Wedding date creates a rush of hotel bookings >>

Royal Wedding to spark influx of tourists from fast growing countries >>

By Janet Harmer

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