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PricewaterhouseCoopers warns of ‘storm clouds gathering’ for UK hotels
Storm clouds could be gathering for UK hoteliers, hotel consultants PricewaterhouseCoopers LLP has warned.
Releasing its latest UK Hotel Forecast this week, the firm said the UK hotel sector is continuing its stellar performance of recent years but may be approaching uncertain times.
While UK revenue per available room (RevPAR) is forecast to grow by 6.2 % in both 2007 and 2008, London RevPAR is predicted to grow 10.6 % in 2007 and 9.2 % in 2008.
Occupancy levels in the UK will remain flat at about 75 % over the period.
Robert Milburn, UK hospitality and leisure sector leader, explained: “We should see another two years of good performance for the UK hotel sector but it will be highly dependant on London’s performance and as we know, the storm clouds may well be gathering on the back of the credit crunch currently occupying the headlines.
“One area that looks set for continued growth, though, is the luxury hotel market.
“With room rate growth of 17.4 %, an increasing number of high net worth individuals and a more affluent mass consumer market, it is no surprise that major luxury hotel chains are jostling for position in the capital.”
He said luxury hotel market average room rates could hit £360 in the capital next year.
Liz Hall, head of hospitality research and editor of Hospitality Directions Europe, PricewaterhouseCoopers LLP, added: “Room rates have increased for the past three years in the provinces and for the past six years in London, which is helping make the capital one of the most profitable hotel markets in the world.
“In terms of RevPAR, this has been a story of growth-on-growth but it does now look like levelling off. If events in the markets mean the corporate world stops travelling, the industry could start to feel the impact.”
London currently has 11,300 rooms under development and there are a further 35,000 rooms planned for the rest of the UK between 2007 and 2008.
By Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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