Profit growth in London remains strong as corporate and leisure demand returns
Growth in volume and price across all market sectors kept London hoteliers on a high in October as corporate travellers returned to the city and leisure visitors continued to flock to the capital, according to the latest HotStats survey of approximately 560 full-service hotels across the UK by TRI Hospitality Consulting.
With the culmination of the Paralympic Games in September,
for the first time in what seems like a long time, Londoners have not had a party to attend this month. However, with the return to business as usual, hotels in London achieved a 5.9% increase in (Revenue per Available Room) RevPAR as growth was achieved in both room occupancy (+2.2 percentage points) and achieved average room rate (+3.2%).
The growth this month is in contrast to the poor performance in October 2011, when hotels in London suffered their first declines in both RevPAR and Gross Operating Profit per Available Room (GOPPAR) for the year in what turned out to be a tough period of trading in Q4 2011.
However, aside from the pre-Olympic blip during the months of June and July, as a result of the strong performance in Q1 and the absence of a post-Olympic hangover, year-to-date growth in profit per room was recorded at 6.5% in the ten months to October. And a stable finish to the year could result in the overall 2012 performance exceeding the 2011 GOPPAR increase of 4.7%.
“The London hotel market is truly remarkable and is continuing to enjoy a purple patch, which may well enable a third consecutive year of profit growth.
Last month you would have been hard-pressed to find anyone to commit to the notion that October would be such a positive month of performance, yet at £86.96, hotels in London achieved the second highest profit per room of the year in October, so far only bettered by July,” said Jonathan Langston, managing director at TRI.
Whilst a slight decline was noted in the proportion of demand attributed to the corporate and conference sectors, significant rate growth was achieved across nearly all segments, including corporate (+6.7%), residential conference (+2.1%), leisure (+5.3%) and groups (+4.4%).
Strong growth was also achieved in food and beverage revenue per available room (+7.0%), which contributed to the 5.6% increase in Total Revenue per Available Room (TrevPAR) this month.