UK Hotel Sector Looks For Bounce In The Second Half Of 2003 According To New PricewaterhouseCoopers Forecast
New statistics on the UK hotel sector today issued by PricewaterhouseCoopers forecast customer demand to gradually pick up in the second half of 2003. Latest research by the firm's Hospitality and Leisure Group reflects the UK's improving macroeconomic position, the end of the Iraq War, the containment of Severe Acute Respiratory Syndrome (SARS) as well as marketing efforts to stimulate demand starting to take effect.
Liz Hall, research manager, PricewaterhouseCoopers Hospitality and Leisure Group, said :
"In the absence of further serious incidents and with grounds for optimism in the UK's economic outlook there is no reason to believe that the hotel sector's performance overall should worsen. Indeed recent travel data hints at a recovery on some international airline routes - whether it can be sustained is the real question."
The report, Hospitality Directions - Europe, Forecast Alert, May 2003 (Hospitality Directions Europe), concludes that for the hotel sector few international companies have been unaffected by the current climate although in the UK some segments such as branded budget hotels and provincial operators have proved more resilient.
Liz Hall added:
"Those waiting for a 'bounce' effect in hotel sector demand and earnings when the outlook finally turns, will have to hold their breath for a little longer, as we forecast a longer wait and perhaps a smaller bounce and we have lowered our RevPAR (Revenue Per Available Room) forecast for the UK to 0.7% for 2003, from 1.4% in our previous forecast earlier this year."
Hospitality Directions Europe anticipates that the slow improvement in travel demand during the summer months and towards the latter part of the year will halt further Revenue Per Available Room (RevPAR) declines for 2003. Nevertheless the report expects that UK occupancies will remain flat in 2003 and Average Daily Room-Rates (ADR) are expected to demonstrate only a marginal increase.
Robert Milburn, leader, PricewaterhouseCoopers Hospitality and Leisure Group commented:
"By 2004, as economic growth strengthens and business travel confidence improves, we expect RevPAR growth to increase by 3.1%. Although London continues to be particularly adversely affected by the decline in overseas visitors we expect London can achieve marginal RevPAR growth of 0.6% (down from the 1% we expected in February)."
In London, assuming no more major incidents, more robust growth is expected to resume in 2004 and in 2005. Generally strong domestic demand has buoyed up the Provincial sector but despite this the report anticipates more tempered RevPAR growth of 1.1% in 2003.
Hospitality Directions - Europe Edition - May 2003 is available electronically by subscription only (£190 per annum - includes biannual publication plus two updates).
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