Contact: Sian Mannakee
Deloitte UK Public Relations
+44 20 7303 7883
London, May 5, 2008 –The UK hotel industry witnessed a fall in revenue per available room (revPAR), down 0.5 percent during the first quarter of 2008, according to latest results from the HotelBenchmark™ Survey by STR Global. Deloitte has analyzed the results and while hotels in the capital saw a healthy increase in revPAR, across the regions revPAR did not look as healthy.
In London growth was driven primarily by a 5 percent increase in average room rates, which remain the highest in the UK at £124. Although occupancy fell to 76.9 percent, the capital reported a revPAR increase of 3.4 percent. Even though growth was solid, it has slowed considerably compared to the same quarter last year when revPAR reported a double-digit increase of 10.5 percent. Without doubt the impact of Easter falling early this year and the related school holidays had an impact on results as conferences are displaced into April. As a result a clear indication of revPAR trends will not be available until these results can be amalgamated. Actual performance has therefore been better than the results suggest.
Regional UK hotels also saw improvements in average room rates but more muted than in the capital, up just 1.5 percent to £65. This, combined with a fall off in occupancy to below 65 percent, resulted in a 1.3 percent decline in revPAR to just £42.
The historic city of Bath boasts the highest average room rate outside the capital at £86. Despite occupancy dipping slightly, average room rates have increased £5 over the first quarter last year. Hotels in Liverpool are benefiting from the city being the European Capital of Culture 2008, with a host of festivals and events driving more tourists into the city. For the first quarter of 2008, revPAR in the city rose 8.4 percent, driven by increases in both occupancy and average room rates. Other cities across the UK that are also performing well include Belfast, Hull and Inverness.
"Overall, the first quarter of 2008 has been a positive one for hotels in both London and Regional UK," said Marvin Rust, Hospitality Managing Partner at Deloitte. "Although the industry’s growth story is showing signs of slowing, the fact that there has been room rate growth is a big plus for hoteliers given the current economic conditions. Deloitte’s first quarter CFO Survey revealed that 65 percent of CFO’s expect to cut costs in response to slower economic conditions and the credit crunch. In light of this, the remainder of 2008 looks challenging as businesses tighten their belts. Traditionally, travel, hotel, training and entertainment budgets have been the first to be squeezed in a downturn. This has historicallly been most apparent in London where corporate demand is a more significant factor. To date however hotel demand has arguably been more resilient than that on the High Street."
| UK city performance, Q1 2008 |
| Location |
Occupancy ( %) |
Average room rate (£) |
RevPAR (£) |
RevPAR chang ( %) |
| Aberdeen |
68.7 |
77 |
53 |
2.4 |
| Belfast |
71.9 |
78 |
56 |
7.4 |
| Birmingham |
67.2 |
74 |
50 |
-5.8 |
| Bournemouth |
61.3 |
66 |
40 |
6.1 |
| Brighton |
59.0 |
75 |
44 |
-3.4 |
| Bristol |
65.9 |
70 |
46 |
-6.5 |
| Cardiff |
64.8 |
65 |
42 |
-7.5 |
| Edinburgh |
66.0 |
76 |
50 |
0.2 |
| Glasgow |
67.3 |
63 |
43 |
-1.2 |
| Leeds |
68.1 |
61 |
41 |
1.0 |
| Liverpool |
73.8 |
68 |
51 |
8.4 |
| London |
76.9 |
124 |
95 |
3.4 |
| Manchester |
67.6 |
74 |
50 |
-3.9 |
| Newcastle |
67.4 |
65 |
44 |
1.8 |
| Nottingham |
58.8 |
56 |
33 |
-4.2 |
| Reading |
60.7 |
75 |
46 |
-13.7 |
| Sheffield |
69.9 |
53 |
37 |
-0.8 |
| Swindon |
60.3 |
63 |
38 |
0.7 |
| York |
63.9 |
64 |
41 |
3.3 |
Note: All analysis in UK pounds.
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