UK Hotel Industry Set To Post Record Growth In 2007 | Deloitte Reports

• Aberdeen and London lead the charge
• Visitors pay £6 extra for their rooms from the same time last year

2007 looks set to be a five-star year for the UK hotel industry with revPAR growth (revenue per available room) of 8.8% in the first three months of the year and double–digit increases in a number of UK cities. The results come on the back of three years of consecutive growth across the hotel industry and Deloitte’s findings show the average hotel room now costs £6 more than at the same time last year.

The preliminary results from the HotelBenchmark™ Survey show Aberdeen is the fastest growing hotel market, with staggering revPAR growth of 22.4% between January and March this year. Bolstered by demand from the oil and gas industry, the average hotel room in Aberdeen now costs £73, an increase of £20 over the past three years.

London also experienced strong growth with revPAR increasing by 14.0% this year. It remains the UK’s most expensive city with the average hotel room costing £119 a night, up from £107 in March last year. Since the beginning of January, London hoteliers have increased average room rates by 11.6% without experiencing any drop in occupancy levels.

Despite being the priciest city, the best performing sector in London is the under £80 market, which saw revPAR growth of 22.5% in the first three months of the year, a marked turn-around from its performance last year. In the same period last year, the under £80 market was the weakest London sector, posting growth of 1.7%.

Airport hotels at Gatwick and Heathrow have also done well. Occupancy rates in airport hotels are now comfortably in excess of 80% and airport hoteliers can be expected to increase their room rates in response to rising demand.

Marvin Rust, Hospitality Managing Partner says: "The outlook for UK hotels in 2007 is very positive. A number of UK cities have experienced a strong start to the year, building on the growth they achieved in 2006".

"Looking to summer, when the capital will host the Tour de France Grand Depart and regional cities also see an increase in events, we expect further improvements in average room rates. The only question-mark on the continued growth of the hotel market is whether the rising pound will deter US travellers from visiting and if UK consumer spending will continue against a backdrop of interest rate increases" said Rust.

Other results include:

• After being the poorest performing city in 2006, Nottingham has seen a turn-around in the performance of its hotel market. RevPAR has increased 7.6% this year. Demand increased during the Conservatives’ spring conference which was held in March and while a considerable number of new rooms have opened over the past two years, this supply has now been absorbed, allowing hoteliers to increase their rates without an adverse impact on occupancy.
• Outside of London, Reading is the most expensive city to stay in with average room rates of £86 in the first three months of the year.
• Growth in Glasgow has overtaken Edinburgh, with revPAR increasing 13.4%, compared to 5.6%. Glasgow has benefited from a number of events this year including the Immunology Congress and the UK diabetes meeting. However, average room rates will need to rise by £12 a night to match the average £74 paid for rooms in Edinburgh
• Brighton and Bristol were the only cities to experience negative revPAR growth. They saw revPAR fall by 6.4% and 3.1% respectively. Brighton has not had as many events this year and occupancy is suffering in Bristol following the opening of several new hotels.

The HotelBenchmarkT Survey by Deloitte contains the largest independent source of hotel performance data outside of North America and tracks the performance of over 7,200 hotels and 1.3 million rooms every month. Monthly surveys are produced on the following areas:

• Four regional rate and occupancy surveys covering Asia-Pacific, Europe, Central & South America and the Middle East & Africa.
• Twelve country/sub region rate and occupancy surveys for Australia, Benelux, China, Germany, India, Italy, New Zealand, Nordic Countries, Qatar, Southern Africa, Spain and UK.
• Two city rate and occupancy surveys for London and Paris.
• Monthly profitability surveys on Germany and London.
• On an annual basis we produce profitability surveys tracking performance across all regions of the world.
• Daily HotelBenchmarkT tracks rate and occupancy everyday for a number of markets across the Asia, Europe and the Middle East.

About Deloitte | In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country's leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu ('DTT'), a Swiss Verein whose member firms are separate and independent legal entities. Neither DTT nor any of its member firms has any liability for each other's omissions. Services are provided by member firms or their subsidiaries and not by DTT. Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. The information contained in this press release is correct at the time of going to press. For further information, visit our website at .