May heatwave drives ‘welcome boost’ in hotel bookings

Consumers took advantage of May’s warm weather, which coincided with the month’s half term breaks and bank holiday, to book last minute trips – driving an increase in average daily rates and occupancy levels.

According to the RSM UK Hotel Tracker, compiled and produced by Hotstats, occupancy of UK hotels edged up to 0.3% to 79.7% during the month, but remained flat in London.

Average daily rates (ADR) rose 4% year-on-year to £156.72 across the UK overall, and increased 4.6% to £219.37 in London specifically. As a result revenue per available room (RevPAR) rose from  £119.74 to £124.84 in the UK and from £171.76 to £179.89 in London.

Despite strong occupancy levels increased operational costs meant gross operating profits across the UK hotel sector were flat year-on-year, holding at 36.8% and 39.3% across the UK overall and London respectively.

RSM UK partner and head of hotels Chris Tate said: “What may appear to be small improvements in occupancy should be seen as a positive, as this is based on historic highs. Strong occupancy levels combined with inflation-busting rises in room rates show consumer demand is still there. May’s heatwave timed nicely with half term and the bank holiday weekend, which dealt hoteliers a welcome boost, particularly with consumers currently favouring last minute bookings. Without the good weather, there’s every possibility that growth would’ve gone backwards.

“Despite the increase in top line, this failed to filter through to profits due to the high cost burden faced by the hotel industry. Previous tax changes, such as the National Insurance rise, increases in national minimum wage and high energy costs highlight the limited capacity hotels have to absorb any additional costs. As a result, hoteliers are working incredibly hard to stand still.”