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UK hotel market remains buoyant

Economy - News

Monday, 31 March 2008

The UK hotel market remained buoyant in February, according to the preliminary monthly figures for February.

As in January, the increases were mainly down to increases in room rate, but occupancy rates also fared well.

The figures, released by PKF Hotel Consultancy Services, show that growth in London continued apace with room rate rising by 5.8 per cent on 2007 from £123.42 to £130.61.

With occupancy remaining static at 77.7 per cent, the overall growth in rooms yield saw a rise from £95.92 last year to £101.45 this year.

In the regions, there was consistent growth with rooms yield rising 2.3 per cent from £49.50 last year to £50.66 this year.

This was a result of a 3.1 per cent growth in room rate and a 0.5 per cent drop in room occupancy – from 69.6 per cent in 2007 to 69.1 per cent in 2008.

European Capital of Culture, Liverpool, had another fantastic month with a 15.2 per cent rise in rooms yield from £50.15 in 2007 to £57.79 in 2008.

This was attributable to a 10.2 per cent increase in room rate and a 4.5 per cent increase in occupancy.

Capitalising on its status, the city has organised various events every month and in February there was a Chinese New Year celebration plus a series of other exhibitions, events and concerts.

While Cardiff had a busy month with the Six Nations Rugby which started on the 2 February, overall it recorded a 2.2 per cent drop year on year in rooms yield – from £50.23 in 2007 to £49.11 in 2008.

Occupancy was healthy, rising 3.8 per cent on last year, but room rate dropped by 5.8 per cent from £71.40 last year to £67.26 this year.

The lower room rate and the Six Nations were probably why occupancy was high, but overall the low room rate meant rooms yield dropped.

Robert Barnard, partner for hotel consultancy services at PKF, said that February was another steady month for UK hotels, with no discouragement for UK hoteliers despite the turmoil in the financial markets since the credit crunch.

“It’s true that 2008 is likely to be slower than 2007, but this is due not just to the global economic conditions, but also the fact that UK hotels have experienced a healthy period of growth over the last couple of years which is now starting to stabilise,” Barnard concluded.

Preliminary data for February 2008

Rooms department	2008	2007	% change
UK regional hotels (602)
Average daily room rate per occupied room	£73.50	£71.09	3.1
Average daily room occupancy	69.1%	69.6%	-0.5
Avergage daily rooms yield per available room	£50.66	£49.50	2.3
Approximate number of rooms per day	81,700	79,500
London hotels (185)
Average daily room rate per occupied room	£130.61	£123.42	5.8
Average daily room occupancy	77.7%	77.7%	0.0
Average daily rooms yield per available room	£101.45	£95.92	5.8
Approximate number of rooms per day	38,700	37,250

PKF hotel trends surveys feature a broad range of hotels across the country although mainly in the 3 – 4 star categories and featuring rather more chain operated hotels than those operated independently.

While there are a fair number of hotels in country and rural areas, there is a predominance of hotels in towns and cities.

In London, supply featured is mainly in the 3 –5 star categories.

Final data for January 2008

Rooms department	2008	2007	% change
UK regional hotels (642)
Average daily room rate per occupied room	£71.41	£68.69	4.0
Average daily occupancy	59.6%	60.4%	-1.3
Average daily rooms yield per available room	£42.58	£41.50	2.6
Approximate number of rooms per day	89,500	88,300
London hotels (202)
Average daily room rate per occupied room	£124.23	£118.21	5.1
Average daily room occupancy	71.0%	71.9%	-1.4
Average daily rooms yield per available room	£88.15	£85.07	3.6
Approximate number of rooms per day	43,300	43,350