Hotel market outlook - Quarter 4 2009
Double-digit growth predicted for London hoteliers in 2010
Hotel market outlook capitalises on Deloitte’s extensive knowledge of the hospitality industry, enabling us to provide commentary and analysis on future trends, as predicted by the e-forecasting model, as well as historic ones. The outlook is produced using data from a consistent sample of hotels collected by STR Global Limited. This data is input into an econometric model developed by the independent economic research firm, e-forecasting Inc, to produce hotel performance outlooks for the London and Regional UK markets.
- Regional UK hotels reported the largest declines in revPAR in 2009, down 10.4%. This was the worst performance in the last 20 years when UK hoteliers suffered as a result of the combined effects of the 1991 Gulf War and the early 1990’s recession. On the flip side, London hoteliers reported more promising results, with revPAR falling just 3.9% for the year.
- The model expects hotels in London to post double-digit revPAR growth in 2010, up 12.8%. This is a significant revision on the last outlook of 1.6% growth predicted. Whilst the risks seem to be all on the downside, with no further shocks, this could be the year that sees double-digit growth in the capital.
- The 2010 outlook for Regional UK hotels is not as optimistic however, with steady and sustained growth expected during the course of this year and into next. As a result, revPAR is predicted to rise 6.3%. With occupancy growth now present across the UK, it does appear that Regional performance is now at a turning point. Although average room rates are still showing declines, this is not unexpected as they will lag occupancy in a recovery.
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