With a year-on-year increase of 1.5 percentage points in October 2009, to 85.1%, the London hotel market recorded the second highest occupancy performance for the capital in 2009, according to the latest HotStats survey by industry experts TRI Hospitality Consulting.
Confidence amongst UK hotel general managers is at a high for 2009. Looking towards the next three months, 61% of respondents are either optimistic or very optimistic about their hotel’s trading performance. For the fourth successive quarter hoteliers are increasingly optimistic. According to the latest Hotel Confidence Monitor by TRI Hospitality Consulting, 50% of respondents are more optimistic than they were three months ago, equivalent to a 34 percentage point increase since January.
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%.
By: Cristina Balekjian and Saurabh Chawla. This market snapshot is the fourth in a series of articles that HVS is producing every month with STR Global data for a number of key markets. Our analysis for this market is based on a sample of more than 9,000 rooms, as provided by STR Global. We consider that in today's challenging market a regular update is more vital than ever in helping to address the changing market consitions and determine the best strategy for each hotel.
London hoteliers successfully improved profitability and boosted total revenue per available room (TrevPAR), according to the latest HotStats survey by industry experts TRI Hospitality Consulting. While payroll levels remained relatively stable, the London hotel market has seen an uplift in Gross Operating Profit per available room (GOP PAR) by almost 43 per cent compared to last month. GOP PAR in August was down 12.4% and in September this improved to 3.9% below 2008 levels, resulting in an increased year-to-date GOP PAR of £54.85.
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%.
Recent data released by STR Global, the leading provider of market data to the world’s hotel industry, shows improving conditions in the Italian hotel market. Occupancy in Rome showed an increase of 17.9 percent during August 2009 compared with the same period from the previous year. Florence and Naples both posted increases in occupancy rates for July and August, indicating that at least the leisure sector is gaining back some of the ground recently lost.
Moscow and St. Petersburg, the two Russian cities tracked by STR Global, the leading provider of market data to the world’s hotel industry, reported revenue per available room (RevPAR) declines for the first eight months of 2009. The increasing supply within both cities coupled with declining demand resulted in occupancy and average daily rate declines.
Year-to-date August 2009 hotel performance indicators in the UK confirm a minor, yet positive swing, signifying a slowdown in market decline. "These performance indicators have a long way to go before suggesting a recovery, but they are indeed a positive sign. The next few months however will be crucial in determining if the hotel cycle is spinning in the right direction; that OR change continues to climb and ADR remains stable," stated Director of Development, MKG Hospitality, Vanguelis Panayotis. "In order for this to occur, improvement should really come from the corporate clientele segment."
Holiday makers boosted occupancy levels for provincial UK chain hotels in August 2009, according to the latest HotStats survey by industry experts TRI Hospitality Consulting. Although occupancy levels were at similar levels to August 2008, provincial hoteliers continued to compete aggressively on price, resulting in an 8.3% year on year drop in achieved average room rate to £64.51. In contrast, the decline in average occupancy levels was only 0.6 percentage points, to 71.8%, representing the smallest margin of decline since the beginning of the year.
With visitor numbers expected to drop 10 percent in 2009, the Spanish hotel market is suffering greater year-on-year declines in performance than some of its European neighbors. Visitors from major source markets such as Germany, the U.K. and France are in decline, with U.K. travelers further deterred by the 20-percent weakening of the sterling against the euro during the past 12 months and the increased competition from Turkey and Egypt.
The German hotel industry has not experienced the steepest performance declines during the economic crisis, but actual occupancy, average daily rate and revenue per available room still remained low compared with Europe. Data based on the monthly and selected daily results collected by STR Global and their partner in Germany, Fairmas, show for the first seven months of the year,
This is the first in a series of articles that HVS will be producing every month on a series of key markets. In writing these articles we are combining the hotel market expertise of HVS with STR Global data for each key city. Our analysis is based on a customized sample of hotels as provided by STR Global. We consider that in today's challenging environment a regular update is more vital than ever in helping to assess the challenging market conditions and determining the best strategy for each hotel.
Since the UK hotel market performance turned negative in September 2008, total room nights sold in the UK have dropped by 2.7%, which is partly attributable to an increase in bedroom stock of around five per cent. Although the budget sector experienced the strongest growth in supply of over nine per cent, compared to less than one per cent for the full-service sector, total room nights sold only marginally dropped by 1.5%, compared to four per cent for the full-service sector. This highlights the relative resilience of budget hotels to the economic downturn.
According to the latest city review by Christie + Co, using data provided by STR Global, RevPAR across London’s Upscale hotels remained flat during 2008 compared to the previous year, due to a 5% increase in ARR, which was offset by a 3.4 percentage points decline in occupancy. Whilst in 2008 the upscale sector maintained rates at the expense of occupancy, STR Global data for 2009 indicates that this year upscale hoteliers are offering better deals to maintain occupancy. This has translated into an ARR decline of 7.4% for the first five months of 2009. Preliminary figures for the month of June suggest that the downturn has continued, with RevPAR down by 9.7% on the previous year.
Hotels in both London and the regions have held up exceptionally well in the global economic downturn with revPAR down by only 11.1%. Recent analysis by Deloitte, the business advisory firm, confirms that drops in London’s revenue per available room (revPAR) continue to decelerate. However, hotels throughout regional UK are suffering to a greater degree when examining half-year results from STR Global
As both passenger numbers and flights fall, what is the effect on airport hotels? Data from STR Global, the leading provider of market information to the world’s hotel industry, shows interesting differences in the performance of the hotel markets at London’s two major airports, Heathrow and Gatwick, during recent months.
Being the least worst is never a high accolade, but in the face of a very tough market the performance of Germany’s main cities is commendable. The May 2009 edition of the European Hotel Review, published by STR Global, the leading provider of market information to the world’s hotel industry, shows German cities taking the top five positions for annual change in revenue per available room (RevPAR) for the year-to-May 2009.
The impact of the recession on UK hotels lessened slightly in May, according to the latest HotStats survey by industry experts, TRI Hospitality Consulting. The rate of decline in occupancy is slowing. For the first 5 months of this year occupancy at UK hotels was down 3.7 points but for May it was down 2.7 points. The decline in rate was slightly more but this was not enough to make the decline in RevPAR worse. RevPAR was down 10.9% in May and down 11.8% for the first 5 months. Most importantly, profit, as measured by income before fixed charges, was down 18.1% for the first 5 months but down significantly less at 12.6% for the month of May.
In depth analysis by Deloitte, the business advisory practice, reveals a clear trend in improvement in UK hotel performance over the last five months. Whilst revenue per available room (revPAR) is still negative, the pace of decline is reducing and some markets are actually showing gains on 2008 numbers with strong leisure demand driving up weekend occupancies and revenues. There is also a trend of improving performance in the weekday corporate business market in London.