London Hotels Enjoy A Solid Month As The Regions Continue To Shine

London hotels had a solid month in May but continued to lag behind their regional counterparts, according to preliminary hotel figures released today by business advisory and accountancy firm, BDO LLP.

London hotels posted a 0.9% year-on-year reduction in room rate to £136.27, compared with £137.45 12 months ago, and a 1.9% increase in occupancy from 83.6% to 85.2%. This resulted in rooms yield growth of 1.0% from £114.99 to £116.12.

In the regions, a 1.7% drop in room rate to £60.32, compared with £61.38 in May 2012, was offset by a 4.1% rise in occupancy from 72.7% to 75.7%. Rooms yield consequently improved by 2.3% from £44.65 to £45.67.

Robert Barnard, partner at BDO LLP, commented: “It is encouraging to see operators across the country posting year-on-year growth in rooms yield. Hotels in London, in particular, will be relieved that they are back in the black after several difficult months.

“The market remains challenging but the sector is, as always, putting up a strong fight. Hotels are being canny and using a wide range of tactics, including selective price discounting, to reinforce revenues at a time when the economy is only just starting to show signs of improvement.”

Preliminary data for May 2013

Final data for April 2013

BDO’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. The definitions of the key terms used in the surveys are as follows:
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).

Accountancy and business advisory firm, BDO LLP, is the UK member firm of the BDO International network. BDO LLP has recently merged with PKF (UK) LLP to form a new force in the mid-market. The firm now employs 3,500 people across 23 UK locations, generating revenues approaching £400m.

The combined fee income of all the BDO Member Firms, including the members of their exclusive alliances, was $6.015 billion in 2012. The global network provides business advisory services in 138 countries, with almost 55,000 people working out of 1,204 offices worldwide.

BDO LLP has a clear ambition to be the firm known in the market for exceptional service delivered by empowered people. The 2011/12 Mid Market Monitor analysis – completed in April 2012 – shows that BDO has now indeed become market leader for client satisfaction – outperforming all its major competitors and the only organisation to see an improvement over the past three years.

BDO LLP, a UK limited liability partnership registered in England and Wales under number OC305127, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. A list of members' names is open to inspection at our registered office, 55 Baker Street, London W1U 7EU. BDO LLP is authorised and regulated by the Financial Services Authority to conduct investment business.

BDO is the brand name for the BDO International network and for each of the BDO Member Firms.

BDO Northern Ireland, a partnership formed in and under the laws of Northern Ireland, and BDO (Isle of Man) LLC are associate firms and licensed to operate within the international BDO network of independent member firms.