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Footy-Free May Causes London Hotel Occupancy Dip

The absence of a major sporting event has resulted in slow growth and a dip in occupancy for hotels in London, according to preliminary figures released by business advisory and accountancy firm, BDO LLP.

London hotels have seen modest growth in May. Rooms yield averaged at £97.89, up 2.1% on last year, whereas room rate figures increased by 4.1% to £117.27. Occupancy in the capital, however, fell by 1.9% to 83.5%. The 2013 boost in occupancy was the result of the UEFA Champions League Final held in Wembley.

Regional hotels, on the other hand, have pipped those in the capital to the post with strong increases in room rate and rooms yield in May.  Hotel operators in the regions saw an increase in rooms yield to £45.42, an 8.9% jump on last year, while the average room rate rose by 8.4% when compared to May 2013 to £59.85. Occupancy also increased by 0.5% to 75.9%.

Robert Barnard, partner at BDO LLP, commented:

“After a strong start to the year in both London and the regions, we have seen the regions pull ahead in the last month. Two bank holidays have certainly had an impact as holidaymakers escape to the country for the long weekends, but the real deciding factor for the capital has been the absence of a major sporting event. The actual occupancy level achieved of 83.5% in London does, nevertheless, reflect robust trading conditions in the capital.

“The UEFA Champions League Final hosted at Wembley in May 2013 saw an influx of tourists from the continent, while the past month has been relatively quiet in comparison with the build up to the World Cup. It remains to be seen how this major international tournament will impact the UK hotel sector.”

Rooms department 2014 2013 % change
UK Regional hotels      
Average daily room rate per occupied room £59.85 £55.22 8.4%
Average daily room occupancy 75.9% 75.5% 0.5%
Average daily rooms yield per available room £45.42 £41.70 8.9%
Approximate number of rooms per day 83,700    
London hotels      
Average daily room rate per occupied room 117.27 112.61 4.1%
Average daily room occupancy 83.5% 85.1% -1.9%
Average daily rooms yield per available room £97.89 £95.87 2.1%
Approximate number of rooms per day 22,200    

 Final data for April 2014

Rooms department 2014 2013 % change
UK Regional hotels      
Average daily room rate per occupied room 57.70 53.72 7.4
Average daily room occupancy 73.6 73.0 0.8
Average daily rooms yield per available room 42.48 39.27 8.2
Approximate number of rooms per day 98,100    
London hotels      
Average daily room rate per occupied room 128.22 121.82 5.3
Average daily room occupancy 83.4 82.8 0.8
Average daily rooms yield per available room 106.94 100.83 6.1
Approximate number of rooms per day 38,850    

 

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).

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