24. Juli 2012 
Print
Print
London hoteliers undone by Jubilee celebrations and Olympic anxiety
Hotels in London recorded by far the worst performance of 2012 as the extended holiday for the Queens Diamond Jubilee and governmental warnings around transport and fears over accommodation pricing before and during the Olympics meant that the city suffered a detrimental decline in business visitors, according to the latest HotStats survey of approximately 560 full-service hotels across the UK by TRI Hospitality Consulting.
Profit per room at London hotels declined by 9.3% in June to £85.87 as Total Revenue per Available Room (TrevPAR) dropped by 5.0% to £165.83 on the back of a 5.7 percentage point decline in room occupancy to 83.3%. Although at 0.8% the drop in achieved average room rate for London hotels in June was minimal, it represented the first time in 32 months that this measure suffered a drop, to £148.18 from £149.34. The drop in revenue was further exacerbated by a 2.1% increase in payroll costs per available room to £35.99, contributing to a 1.5 percentage point increase in payroll to 21.7% of total revenue.
The 2.1 percentage point increase in demand from the leisure sector, driven in part by the first week’s play at Wimbledon, was not enough to offset the decline in business demand due to the double bank holiday over the Diamond Jubilee, which had a similar effect on London hotel performance as the Royal Wedding in April 2011, and pre-Olympic travel anxieties.
The residential conference sector was the worst hit with a 0.9 percentage point decline in the proportion of demand attributed to this segment combined with a 6.7% decline in the achieved sector rate to £171.19 from £183.40.
In addition, the achieved rate in the Best Available Rate (BAR) sector, which is a good barometer of peak demand periods, dropped by 13% to £177.17 from £203.67.
“Although the Jubilee festivities enabled London to look busy in June, the city was primarily filled with day visitors with everyone else choosing to escape to the country or overindulging on street party tea and scones.
Amongst the doom mongering brought about by the decline in headline performance levels, we must remember that at a room occupancy of 83.3% and an achieved average room rate of £148.18, the performance in June was well ahead of the year-to-date stats for London and remains very strong,” said David Bailey, deputy managing director at TRI.
Profit per room at London hotels declined by 9.3% in June to £85.87 as Total Revenue per Available Room (TrevPAR) dropped by 5.0% to £165.83 on the back of a 5.7 percentage point decline in room occupancy to 83.3%. Although at 0.8% the drop in achieved average room rate for London hotels in June was minimal, it represented the first time in 32 months that this measure suffered a drop, to £148.18 from £149.34. The drop in revenue was further exacerbated by a 2.1% increase in payroll costs per available room to £35.99, contributing to a 1.5 percentage point increase in payroll to 21.7% of total revenue.
The 2.1 percentage point increase in demand from the leisure sector, driven in part by the first week’s play at Wimbledon, was not enough to offset the decline in business demand due to the double bank holiday over the Diamond Jubilee, which had a similar effect on London hotel performance as the Royal Wedding in April 2011, and pre-Olympic travel anxieties.
The residential conference sector was the worst hit with a 0.9 percentage point decline in the proportion of demand attributed to this segment combined with a 6.7% decline in the achieved sector rate to £171.19 from £183.40.
In addition, the achieved rate in the Best Available Rate (BAR) sector, which is a good barometer of peak demand periods, dropped by 13% to £177.17 from £203.67.
“Although the Jubilee festivities enabled London to look busy in June, the city was primarily filled with day visitors with everyone else choosing to escape to the country or overindulging on street party tea and scones.
Amongst the doom mongering brought about by the decline in headline performance levels, we must remember that at a room occupancy of 83.3% and an achieved average room rate of £148.18, the performance in June was well ahead of the year-to-date stats for London and remains very strong,” said David Bailey, deputy managing director at TRI.
