London proves to be one of the most resilient cities in the downturn
Leisure demand for hotels on weekends has been particularly strong
London, 1 November 2009 —Deloitte, the business advisory firm, has confirmed that hotels in the UK saw revenue per available room (revPAR) fall 10.9% to £60, during the first three quarters of 2009. Average room rates fell 7.2% to £85 while occupancy dropped 4.0% to 70.5%.
Hoteliers in London saw revPAR fall 7.4% to £98, as £10 were knocked off average room rates compared to last year. Occupancy saw a marginal decline of 0.2% reaching 80.4%.
Marvin Rust, Hospitality Managing Partner at Deloitte, commenting on the London results said: “To achieve over 80% occupancy during one of the most severe economic downturns in history is very impressive, and the capital is proving to be one of the most resilient cities across the globe. Leisure demand on the weekends has been particularly strong in London resulting in hotels achieving stronger results during several weekends this year compared to last.”
Meanwhile, hotels across the regions saw more significant declines in revPAR as it fell 13.1%. Average room rates were the main culprit behind the decline, down 7.9% to £67, while occupancy fell 5.7% to 66.4%.
Glasgow is still experiencing the least severe revPAR drop across the UK, down only 1.4%, as it continues to attract more events such as the MOBO awards which it held at the end of September. Edinburgh, Cardiff and Newcastle are also holding up well experiencing single digit revPAR decline year-on-year.
Hotels at Gatwick and Heathrow continue to experience some of the steepest declines across the UK, with revPAR falling 22% in each market. Less passenger traffic is suppressing demand for hotel nights and according to BAA, passenger traffic at Gatwick fell 8.9% year-to-August as a result of the open skies agreement. However, during the month of August, Gatwick grew its domestic and European traffic and this if sustained should have a positive knock on affect on hotel demand in due course. Heathrow’s passenger traffic dropped 2.6% year-to-August, but hotel performance has also waned due to the new room supply that entered into the market with the opening of Terminal 5 last year.
Meanwhile, hotels in Reading are suffering the worst decline in revPAR down 24.9% to £41, with occupancy decreasing 16.7% to a humble 55.6% while average room rates dipped 9.9% to £74.
Marvin Rust added: “The number of overseas visitors to the UK were down 8% during the first seven months of the year, according to the Office for National Statistics. However, a surge in domestic tourism is counter-balancing this decline. So far this year, overseas departures by UK residents have decreased 16% as the appeal to holiday in the UK heightens. This has helped hotels to avoid the massive average room rate discounting that has taken place in other European countries.”
Year-to-30 September daily UK hotel performance
|Occupancy (%)||Average Room Rate (£)||RevPAR (£)||RevPAR % change|
All analysis in GBP
All data is daily STR Global daily data covering the period from 1 January – 30 September 2009
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