Hoteliers in London could see double-digit revenue-per-available-room growth this year, according to the latest Hotel Market Outlook, a quarterly report issued by Deloitte.
Marvin Rust, Hospitality Managing Partner at Deloitte, said: “Actual Q4 2009 results in London smashed predictions, seeing revPAR rise 7.4% rather than the 3.5% decline previously forecast, and the start to Q1 2010 has been impressive. Year-to-date gains of 10.1% have already been recorded, and while Q1 as whole will be a little softer than the original prediction of a 15.8% revPAR rise, due to the bad weather, it does look set to end with gains in the region of 10 – 15%. With no further shocks, this could be a year that sees double-digit growth in the capital.”
The latest Outlook expects the first three quarters of the year to post double-digit revPAR increases, although this will decelerate towards the end of the year. More than £10 is expected to be added to average room rates in London while occupancy is expected to peak in Q3 at 87.2%. However, the first outlook for 2011 suggests that the strong growth this year will not be sustained next year, with revPAR growing at a more moderate 1.4%.
The immediate outlook for Regional UK hotels is not as optimistic as for the capital. Steady and sustained growth is expected during the course of this year and into next. Occupancy is expected to claw its way back during Q1, and will continue to grow throughout the year. Although it will take until the latter part of the year for any meaningful gains to be seen in average room rates, this will eventually follow. As a result, revPAR growth is expected to rise 6.3% in 2010. In 2011, Regional UK hotels are expected to post stronger growth than the capital, up 5.6%.
London hotel performance (year-over-year % change)
Source: STR Global
Regional U.K. hotel performance (year-over-year % change)
Source: STR Global
Notes to editor:
The outlook is produced using data from an inconsistent sample of hotels collected by STR Global Limited. This data is input into an econometric model developed by the independent economic research firm, e-forecasting Inc, to produce hotel performance outlooks for the London and Regional UK markets.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTT and its member firms.
The information contained in this press release is correct at the time of going to press.
For more information, please visit www.deloitte.co.uk.
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