Regional revpar declines as London hotel performance softens

30 January 2020 by
Regional revpar declines as London hotel performance softens

Performance across UK hotels was polarised between London and regional properties in the final quarter of 2019.

Revenue per available room (revpar) at hotels in the capital increased by 0.9% to £135.25, while hotels outside London showed a revpar decline of 2.7% to £50.73, according to the UK Hotel Market Tracker: Q4 2019 produced by AlixPartners, HVS and STR.

Across the full year, the regions posted an annual revpar decline for the first time since 2015, down 1.9% to £54. Regional occupancy in the final quarter fell by 1% to 73.6%.

Although London recorded positive revpar growth across 2019, up 3.7% to £129.14, it was tempered by a 1% fall in occupancy in the final three months of the year to 84.8%.

An active pipeline amounting to a 11% and 6% increase in room stock in London and the regions respectively could have a further negative impact on rates and occupancies. However, the recent general election result and confirmation of the UK's departure from the EU is expected to have an positive impact on performance in the short term.

HVS chairman Russell Kett said: "Softening occupancy will be a concern in London, particularly given the high number of hotels projects in the pipeline, although the fact room rates have risen by nearly 2% is encouraging.

"Any improvement in yields will take longer to reach provincial hotels but they should start to see some change as we move through 2020. However, the active hotel pipeline, currently at 6% of supply outside London, will continue to prove challenging as it will in the capital."

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