UK Hotel Industry Achieves Growth Of 6.9% In 2007 | Deloitte Reports

London’s 10.8% growth in revPAR came on top of growth of 16.8% in 2006. Average revPAR has increased from £99 to £110, to reach its highest level since the technology boom days of 2000.

Aberdeen retains the top spot with the fastest growing revPAR of any UK hotel market, enjoying impressive growth of 17.2% thanks to strong weekday business demand from the North Sea oil industry. However, with large oil producers saying they will be reducing North Sea oil production next year, growth in 2008 may be more restrained. Outside London, Glasgow follows with growth of 10.5%. However, the revPAR of both Glasgow and Aberdeen is still substantially lower than Edinburgh which, at £69, commands the highest rates outside London.

Marvin Rust, Hospitality Managing Partner at Deloitte said: “2007 has been another good year for the UK hotel market, with strong gains in many UK cities, despite a weakening economic environment in the last quarter. The question is how much longer double-digit growth can continue. So far, the UK hotel industry appears unscathed by troubles across the Atlantic and at home, but with an increasingly gloomy global outlook it would be a brave man to predict that 2008 will be as good as 2007.”

Roger Bootle, economic adviser to Deloitte agrees that next year is likely to be challenging. Commenting he said: “2008 is likely to be the year when the party ends. Consumer spending growth is likely to slow from around 3% last year to about 2% this year and corporations will not escape unscathed either. This will have a direct knock-on effect on the businesses that rely on the City for their trade, including hotels, bars and restaurants.”

Marvin Rust predicts the credit situation is unlikely to impact on new hotel developments: “Although the cost of financing new developments may have risen, with land scarce and hotel projects having long build times I expect these to continue largely unaffected. New supply will remain subdued and demand is strong with the increasing focus of the world on London as we head for 2012.”

UK city performance – year-to-November 2007

Source: HotelBenchmark™ Survey by Deloitte

All analysis in UK£.

¹ The HotelBenchmark figures quoted are based on data from January to November 2007.

The HotelBenchmark™ Survey by Deloitte contains the largest independent source of hotel performance data in the world and tracks the performance of over 7,800 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.
• Thirteen country/sub region rate and occupancy surveys for Australia, Benelux, China, Germany, India, Italy, Japan, 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 HotelBenchmark™ tracks rate and occupancy everyday for a number of markets across the Asia, Europe and the Middle East.

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