Improvements For UK Hotel Sector But Still A Long Way To Go As London Tourism Slump And Uncertain International Economic Environment Cloud Recovery - PwC Reports

The report entitled 'Hospitality Directions ? Forecast Alert ? October 2002' (Hospitality Directions Europe) concludes that the slump in tourists to London, the economic slowdown and the uncertain political environment will lead to further Revenue Per Available Room (RevPAR) declines in the hotel sector this year, in addition to the severe declines reported in the UK and London in 2001. These declines are expected to be most severe in London where they envisage a RevPAR decline of 9.3% this year. Less severe RevPAR declines are forecast for the UK as a whole and the Provinces with RevPAR declines of 2.2% and 2.4 % more likely. These declines are driven by further falls in occupancy across the country but in London discounting has led to a steep fall in average room rates with a decline of 7.2 % forecast this year. At this stage PricewaterhouseCoopers continues to envisage stronger corporate and leisure travel growth throughout 2003.

Liz Hall, research manager, PricewaterhouseCoopers Hospitality and Leisure Group commented:"Overall the incipient recovery reported earlier this year in UK travel markets has been slow and susceptible to a number of setbacks, including the recent Bali bombing that is likely to fuel fears of new terrorist attacks. Overall we are now less optimistic than our mid-year position regarding the out-turn for 2002 and beyond and our latest forecast for UK, London and Provincial hotel markets reflects the weaker than expected recovery in tourism ? especially business travel."

Liz Hall added: "It is not all doom and gloom and international visitors are returning to the UK. In London the city is fighting back and the Mayor's three-year plan - Visit London - should help to restore both strategic direction and tourists to the capital."

Notes to Editor:

• Revenue per available room (RevPAR) - is a key performance metric used in the hotel industry which reflects demand trends. It is calculated by multiplying a hotel's average daily room rate (ADR) by its occupancy rate.
• 'Hospitality Directions ? Europe Edition ? October 2002' is available electronically by subscription only (£190 per annum - includes biannual publication plus two updates). Press copies are available from Semi Da-Cocodia, PricewaterhouseCoopers on +44 (0) 207 804 2189 or [email protected]. Please direct all other queries to Shannon Smith on +44 (0) 207 212 3467 or [email protected]
• Launched in January 2000, PricewaterhouseCoopers 'Hospitality Directions - Europe Edition' is a biannual research journal, with quarterly forecast updates, offering original research on the European lodging industry. The journal draws on PricewaterhouseCoopers extensive lodging data collection, empirical studies and solid econometric models to support all positions and conclusions.
• PricewaterhouseCoopers (www.pwcglobal.com) is the world's largest professional services organisation. Drawing on the knowledge and skills of more than 125,000 people in 142 countries, we build relationships by providing services based on quality and integrity. PricewaterhouseCoopers refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.