Hotels in London saw RevPAR growth of 0.9% in Q4 2019, to £135.25, compared with the previous year, according to the latest UK Hotel Market Tracker: Q4 2019, produced by HVS London, AlixPartners and STR.

Average occupancy for hotels in the capital dropped back slightly in the final quarter of the decade to 84.8%, although average rates rose 1.9% to £159.53.

The UK’s regional hotels saw RevPAR fall in the quarter, down 2.7% to £50.73 and occupancy down marginally to 73.6%, while room rates fell by 2.1% to £68.94.

‘Softening occupancy will be a concern in London, particularly given the high number of hotel projects in the pipeline, although the fact room rates have risen by nearly 2% is encouraging,’ commented HVS London chairman Russell Kett.

‘Any improvement in yields will take longer to reach provincial hotels, but they should start to see some change as we move through 2020. However, the active hotel pipeline, currently at 6% of supply outside London, will continue to prove challenging as it will in the capital.’

With greater political certainty coming from the general election, transaction volumes in London saw an increase in Q4 to a value of £1.5 billion, although transactions in the regions were down 38% to £2.2 billion. The largest transaction in Q4 was the sale of the 211-room Fairmont St Andrews golf resort in Scotland to Great Century for a reported £135 million.

Moving forward, investors are expected to be cautiously optimistic about a resurgence in transaction activity.

‘The recent UK election result and the ensuing Brexit decision is likely to make the UK more attractive to many investors,’ commented Kett. ‘This is likely to have a more immediate impact on transaction yields in London during 2020, although any improvement may be tempered by the pipeline of luxury hotels in inner London.’

You can download a copy of UK Hotel Market Tracker: Q4 2019 here.

Performance and supply growth statistics supplied by STR.

About HVS

HVS is the world's leading consulting and valuation services organization focused on the hotel, restaurant, shared ownership, gaming, and leisure industries. Established in 1980, the company performs more than 4,500 assignments per year for virtually every major industry participant. HVS principals are regarded as the leading professionals in their respective regions of the globe. Through a worldwide network of over 50 offices staffed by 300 experienced industry professionals, HVS provides an unparalleled range of complementary services for the hospitality industry. For further information regarding our expertise and specifics about our services, please visit www.hvs.com.

Russell Kett
Chairman
+44 20 7878 7701
HVS

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