UK room rates fall for first time since August 2003

27 October 2008 by
UK room rates fall for first time since August 2003

The study, by consultancy Deloitte, showed that, in September, average room rates across the UK were down 0.5% on the year before.

While this marked the first month of average room rate decline since April 2006, the like-for-like results for that month which were skewed due to Easter falling in March 2005. It was, in comparable terms, the first drop since August 2003.

Nevertheless, the UK hotel sector managed to post a 2.4% increase in revenue per available room (revpar) in the year-to-September, up to £62. This was driven by a 3.9% increase in average room rates, as occupancy fell 1.4%.

Hotels in London were, as usual, the major driver of growth results with revpar up 6.4%, on the back of a 6.7% increase in average room rates. In contrast, the regions only managed to achieve a 0.1% increase in revpar.

Looking ahead, Marvin Rust, hospitality managing partner at Deloitte, warned that the global economic slowdown would make for a challenging final quarter for UK hoteliers, especially if London hotels begin to struggle.

He urged hotel operators to take steps to cope with the drop in consumer spending, but warned against cutting rates.

"Rate discounting can create price wars between hotels and growing average room rates back to previously achieved levels is difficult," Rust said.

"Creating innovative ways of attracting guests is now more important than ever and incentives that will boost occupancy such as a package to include say dinner or spa treatments may work out to be a better strategic option."

TRI HotStats: annual UK hotel figures - Industry data >>

UK hotel revenue falls in first quarter of 2008 >>

UK hotels named most expensive in Europe >>

Read more news, analyses and comment on the UK hotel sector here >>

For the latest developments on the credit crunch see go to

By Daniel Thomas

E-mail your comments to Daniel Thomas here. jobs
Looking for a new job? Find your next job here with jobs

The Caterer Blog]( Catch up with more news and gossip on the Caterer Blog here
[Newsletters For the latest hospitality news, sign up for our e-mail newsletters.
The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking