LONDON hotels are expected to enjoy a surge in revenues this year, according to the latest forecast released this morning from PwC, as people flock to the UK to watch the Rugby World Cup.
The accountancy firm predicts that revenue per available room (revpar), a key industry measure, will rise by five per cent to reach more than £122, fuelled by a 1.5 per cent rise in occupancy to 84 per cent.
It also expects to see a continued revival in the regions, with a revpar growth of six per cent to almost £50 and occupancy – boosted by the Rugby World Cup – increasing by 1.6 per cent. Hotels are expected to be, on average, around 76 per cent full.
Rugby matches will be held across the country in cities including Birmingham, Leeds, Newcastle and Manchester as well as London.
“With a third of matches set to be played on a Sunday – traditionally a low occupancy night – the event is a great opportunity for hotels,” Liz Hall head of hospitality and leisure research at PwC, said.
So far, for the 10 months to October 2014, revpar in London has risen by 2.8 per cent to hit £117, with occupancy averaging 83.3 per cent.
“Steeper supply growth is expected to return this year as investors and developers continue to demonstrate high confidence in the capital,” Hall said.
In the regions, revpar has soared by 10.4 per cent to reach almost £49. Glasgow was one of the best performing cities thanks to the Commonwealth Games, with revpar up 24 per cent. Other cities including like Bristol, Cardiff, and York have seen double digit growth.
“The UK economic recovery is gathering pace and should bring good news for London and regional hotels as travel and consumer confidence pick up,” Hall added.
However, she warned that ongoing geopolitical uncertainty could hurt the hotel sector if people decide to shelve holidays or business trips, both in the UK and further afield.