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London hotels achieve 16% growth
London hotels achieved double–digit growth in revenue per available room (revPAR) in 2006 while the regions also saw a healthy increase.
The revPAR in London increased by 16.8% from £82 to £96, to reach its highest level since 2000, according to latest results from the HotelBenchmark survey by Deloitte.
Hotels in the regions had a more moderate 4.4% rise, still the third year of consecutive growth.
London’s 16.8% growth in revPAR was a major improvement on 2005 performance when terrorist bombings in the capital limited growth to just 2%.
Aberdeen was the fastest growing hotel market outside London, with 15.1% growth of due to strong weekday business demand from the North Sea oil industry. Belfast followed Aberdeen with growth of 13.9%. But the revPAR of both cities was still substantially lower than Edinburgh which, at £67, commanded the highest rates outside London.
Nottingham was the poorest performing city recording 5.2% drop in revPAR reflecting recent significant supply increases in the city.
Hotel performance in Yorkshire also declined. Sheffield, Leeds and York saw revPAR fall by 1.7%, 0.4% and 0.6% respectively, according to the survey.
Deloitte hospitality managing partner Marvin Rust said: “2006 has been a great year for the London hotel market after the challenges of 2005, buoyed by the return of Farnborough and the Motor Show.
“The capital appears to have learnt valuable lessons from the past and is also reaping the rewards of more sophisticated revenue management.
“The increasing emphasis on the hotel brand and the continuous development of hotel products will be a key focus for the UK hotel industry in 2007.
“As increased competition means most gateway cities are reaching saturation point, brand, long held as the most important value driver in consumer business, is receiving the industry’s full attention. The changes in customer lifestyle, demanding experiential stay, will mean that brand choice, as opposed to location choice will lead the way in the future.
“In the constant battle to differentiate themselves from the competition, I expect hotel groups to continue to seek out major fashion houses to help them build their hotel brands leading to further strengthening of the boutique hotel market in 2007.”
Report by Phil Davies
Phil Davies
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