London hotels outstrip their country rivals

LONDON’S hotel sector is beginning to see signs of economic recovery after taking a hit from the
recession, while the UK’s provinces continue to experience difficulties.

According to new research by professional services company PricewaterhouseCooper (PwC), revenue per available room is projected to grow by three per cent this year and five per cent in 2011.

A rise in occupancy numbers at London hotels has contributed to the increase in room revenue after levels continued to grow consecutively during the last five months, with PwC reporting record high numbers for the final quarter of 2009.

“Growth in the UK hotel industry reflects the capital’s resilience to the recession. We think the worst is over and London looks set build on its flourish in late 2009,” commented Robert Milburn, UK hospitality and leisure leader at PwC.

Milburn said that higher levels of transient visitors, more group conference bookings and a return of the business traveller are positive signs for London’s continued growth.

During the first half of 2009, the hotel industry saw revenue numbers slide by nine per cent but recovery during the latter half of the year saw annual revenue down by just under five per cent in London.

PwC said the return in the hotel market, would mean that hoteliers will have sufficient volume to increase room rates to an average of £120 per room.

The growth in London however, is not mirrored by the rest of the UK as the provinces continue to suffer.

The report said that provincial hotels remain heavily dependant on domestic corporate and leisure demand, which have dwindled during the year.

Meanwhile, cuts to public sector spending could stunt growth in the hotel industry according to PwC, which says that one per cent could be shaved off of projected sector growth in 2010 and 2011 should the cuts become deep enough.