 Happy Easter for London Hotels while regional cities feel the cold
28 May 2009: While London hoteliers were successful in filling their beds in April – albeit at lower room rates - regional hotels suffered a significant fall in room rates and occupancy, according to monthly figures released today by PKF Hotel Consultancy Services.
Average room occupancy in London was 82.5%, up 0.9% on April 2008 but room rate fell 10.6% to £123.85 dragging rooms yield down by 9.7% to £102.11. Although room occupancy held out well, given the recession, it is likely that this was only achieved by extensive use of leisure discounting deals to attract visitors into the capital over Easter.
The significant fall in yield in April accelerates the year to date downward trend to £93.89, a 7.9% fall from £101.89 in April 2008.
The April figures for regional figures reveal a gloomy landscape in which the three main performance indicators of room rate, occupancy and yield are now in double digit decline. The room rate fell by 11.2% from £78.17 in April 2008 to £69.43; occupancy was down 13.6% to 63.9%; and rooms yield plunged 23.2% to £44.40. The year to date fall in yield has now fallen 15.6% from £51.93 in 2008 to £43.85.
The UK’s second and third largest cities – Birmingham and Leeds – had a grim April as did Liverpool and Manchester, the seventh and ninth largest. Birmingham hoteliers suffered a 20% drop in occupancy and 15% reduction in room rate which resulted in rooms yield falling by almost a third (32.1%) to £42.72. Leeds fared almost as badly with the combination of a 24% drop in occupancy and a 9% fall in room rate causing a 30.8% plunge in yield to £40.45 from £58.46 the previous April.
Liverpool rooms yield also fell sharply by 28.6% to £59.55 while Manchester rooms yield dropped 21.7% to £55.77.
In contrast, the underlying year round strength of Edinburgh as a business and leisure visitor destination was demonstrated by a 6% increase in occupancy to 77.2% which was achieved at the expense of only a 6.1% drop in room rate from £85.64 to £80.46.
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 | Robert Barnard, partner for Hotel Consultancy Services at PKF, commented, “While the buoyant occupancy figures for London are indicative of the capital’s resilience to virtually every kind of economic, political, biological and climatic turbulence, hoteliers are clearly sacrificing margin in order to fill their beds. The longer the recession continues, the more it will eat into these margins and the harder it will be for hotels to survive. |
“But London has enduring appeal as a major world destination and the long range weather forecast for a hot summer and the vast programme of concerts, sporting and cultural events can only be good news for battling hoteliers.
“The worsening scenario in the UK’s major cities, however, must be of serious concern to the hotel industry as a 30% drop in yield clearly cannot be sustained over a long period of time. It is too soon to say how much the April Easter is responsible for the dire results but we can only hope that the glimmerings of more positive economic news among the gloomy headlines will result in a better second half of the year.”
Preliminary data for April 2009
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| UK Regional hotels (477) | | | |
| Average daily room rate per occupied room | £69.43 | £78.17 | -11.2 |
| Average daily room occupancy | 63.9% | 73.9% | -13.6 |
| Average daily rooms yield per available room | £44.40 | £57.82 | -23.2 |
| Approximate number of rooms per day | 68,850 | 68,550 | |
| London hotels (167) | | | |
| Average daily room rate per occupied room | £123.85 | £138.47 | -10.6 |
| Average daily room occupancy | 82.5% | 81.7% | 0.9 |
| Average daily rooms yield per available room | £102.11 | £113.17 | -9.8 |
| Approximate number of rooms per day | 36,600 | 36,500 | |
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For further information or to speak to Robert, please contact:
Jane Murray, PR Executive, 020 7065 0135, jane.murray@uk.pkf.com
Notes to Editors:
- PKF (UK) LLP is a leading firm of accountants and business advisers with more than 1,500 partners and staff operating in 23 offices in the UK mainland firm, incorporating a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience public and not-for-profit sectors. Principal services include assurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk.
- PKF (UK) LLP is a member firm of the PKF International Limited network of legally independent firms. The PKF International Limited network has around 15,000 people operating in 120 countries around the world.
- PKF (UK) LLP has been providing hotel consultancy services since the early 1970s and, in that time, has undertaken thousands of assignments throughout Europe, the Middle East and Africa and further a field. Services include: market evaluation and financial feasibility studies; operational and profit improvement reviews; asset management; business valuations; international property services; corporate strategy and planning; litigation support. PKF’s web site features regular articles from the firm’s hotel consultancy services experts on industry topics – the address is www.pkf.co.uk/hotelcons.
- PKF (UK) LLP’s hotel trends surveys feature a broad range of hotels across the country although mainly in the 3 – 4 star categories and featuring rather more chain operated hotels than those operated independently. While there are a fair number of hotels in country and rural areas, there is a predominance of hotels in towns and cities. In London, supply featured is mainly in the 3 –5 star categories.
Final data for March 2009
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| UK Regional hotels | 482 | 482 | |
| Average daily room rate per occupied room | £72.14 | £75.75 | -4.8 |
| Average daily room occupancy | 64.8% | 67.7% | -4.4 |
| Average daily rooms yield per available room | £46.76 | £51.34 | -8.9 |
| Approximate number of rooms per day | 72,600 | 72,350 | |
| London hotels | 172 | 172 | |
| Average daily room rate per occupied room | £125.22 | £140.39 | -10.8 |
| Average daily room occupancy | 82.4% | 81.6% | 0.9 |
| Average daily rooms yield per available room | £103.17 | £114.59 | -10.0 |
| Approximate number of rooms per day | 37,700 | 37,600 | |
Definition of the key terms used in the surveys table are given below:
Room occupancy: the ratio of total occupied rooms to total available rooms
Average achieved room rate (AARR): rooms revenue divided by the total number of guest rooms occupied during the year.
Rooms yield: room occupancy multiplied by the average achieved room rate (also known as RevPar).
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