After the party | PwC's UK hotels forecast 2013
The UK and other western economies are going through a prolonged period of structural adjustment and relatively low growth and volatility is likely to persist through the mid-2010s. Against this disappointing backdrop, the London hotel market has demonstrated remarkable resilience. Revenue per room dipped by 5% in 2009, but has since rebounded by 25% to reach a record high.
In the UK regions, the picture is different. Here demand is more dependent on the domestic economy, which has been squeezed by high inflation and the aftermath of the financial crisis. Revenue per room is still 10% below its 2007 level. Despite near 70% occupancy rates, hoteliers have been unable to pass price increases through the market. We expect revenue per room and rates to remain broadly flat in 2013, as they have since 2009.
This two-speed economy – with a healthy London market but much weaker demand in the UK regions – looks set to persist in the "new normal" world.
About PwC US
At PwC, our purpose is to build trust in society and solve important problems. We"re a network of firms in 158 countries with more than 236,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.
PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.