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Overseas Visitors And ‘Staycationers’ Result In Bumper Year For UK Hotels

  • Weak pound sees overseas visitor numbers grow for eighth consecutive year
  • UK average room rates pass the £100 mark for the first time despite occupancy remaining flat

An influx of overseas visitors combined with the rise of the UK as a ‘staycation nation’ has resulted in a bumper year for the UK hotel market, according to a new report published today by accountancy and business advisory firm BDO.

BDO’s Hotel Britain report, which analyses rooms yield, occupancy and room rates of UK hotels, reveals the sector experienced another year of positive results in 2017 despite tackling EU uncertainty, a fall in consumer spending and terrorist activity which has impeded the tourism for many European neighbours.

Overseas visitor numbers grew for the eighth consecutive year, setting a new annual record at 38.9m. UK-wide, spend in the leisure and hospitality market also hit record levels at £24.3bn in 2017, up 8% year on year.

According to BDO’s Hotel Britain, UK room rates surpassed the £100 mark to £100.58 for the first time last year, growing 3.4% compared to the year previous. Occupancy remained flat, decreasingly slightly by 0.5%, due to the influx of new supply in both London and the regions.

Scotland posted the strongest performance in the UK, with rooms yield growth up by 4.9% compared to England (1.9%), Wales (4.1%) and Northern Ireland (2.2%).

Robert Barnard, partner at BDO, said: “2017 proved to be another year of consistent growth for UK hotels. The strong performance demonstrates the industry’s robustness despite facing EU uncertainty, an increase in supply and the impact of several terror attacks across the country which occurred during the first half of the year.

“There will undoubtedly be challenges ahead. Rising payroll costs – such as the National Minimum Wage, the Living Wage and increased pension contributions – will impact the bottom line for many businesses. However, hoteliers with robust business strategies will continue to plan and adapt to the changing environment.

“The hotel industry will hope to continue to benefit from the weak pound, which will attract overseas visitors and, indeed, the domestic market as the UK continues its ‘staycation nation’ status.”

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