By Ben Simmons
London’s thousands of independent hotels are preparing themselves for what analysts at PwC predict will be a record year in terms of visitors and revenue per room (revPAR).
“All eyes will be on London this summer as the Queen’s Diamond Jubilee and the London 2012 Games attract the world’s interest,” comments Robert Milburn, PwC’s hospitality and leisure leader. “And without the boost to Q3 from the Games, London hotels would have been looking at a poor year with the impact of the harder trading environment being felt more keenly.”
Average room rates (ADR) will be challenged by cost-conscious consumers and travel buyers seeking value and deals and the effect of lower spending visitors to the Games displacing the usual, higher spending summer tourists.
In 2012 in London, PwC expects an ADR gain of 1.2% taking rates to over £135. We anticipate a further ADR decline in the Regions of 2.1%, where there has been no annual rates growth since 2008, taking ADR down to only £57.
“For London in Q3 we expect occupancy to hit almost 92% and with rates at £156 pushing RevPAR to almost £144, a growth rate of over 21% over Q3 2011,” adds Liz Hall, head of hospitality and leisure research. “Many operators expect trading to remain flat in London at best outside Q3 and we continue to forecast slight RevPAR declines in Q2 and Q4.”
Budget rooms comprise almost half the total pipeline for even the Central zone. In the East it’s around 51% and in the West 41% of the 2012 pipeline. In the North and South budgets currently comprise 100% of all the [new] rooms.
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