UK hotel performance set to grow and grow

Ongoing economic improvements, an increase in inbound tourism and this year's Rugby World Cup are expected to help drive record occupancy figures during 2015, according to a new forecast from accountancy group PWC.

Occupancy is projected to increase to a record high of 76% (up 0.9%) in the regions, while the forecast occupancy in London of 84% (up 1.6%) is the highest for almost 20 years.

Following a buoyant 2014, revenue per available room (revpar) in London is set to rise a further 4.6% to £122 this year and by 4.7% to £127 in 2016.

Revpar growth in the provinces will see gains of 5.4% to £51 and 5.1% to £53, respectively for this year and next.

While the extent of hotel supply has the potential to slow growth in some locations, PWC suggests it will not be enough to put the brakes on overall business patterns.

The 10 UK cities with the most active pipeline of rooms is London, Manchester, Edinburgh, Birmingham, Aberdeen, Glasgow, Newcastle, Liverpool, Cambridge and Bath. An additional 6,430 rooms could open in London this year, taking supply to nearly 136,000. The regions are forecast to see a further 9,420 rooms open, increasing supply to 467,700 rooms.

However, the potential fly in the ointment could be the fall in oil prices, which while being positive for British travellers, who will have more money to spend on holidays, could slow down business from Russia and the Middle East. Further uncertainty may arise from the outcome of the general election in May, unstable events in Greece and Ukraine, and the strength of the pound, which will encourage UK residents to travel abroad