London Hotels Faring Better than Rest of UK

According to a recent report by Deloitte, the occupancy levels in London’s hotels have seen only a marginal decline compared to the rest of UK this year, and the capital is resilient in the face of the slowdown in tourist numbers.

Hotels in the UK saw revPAR fall 10.9 percent in the first three quarters of 2009, to $99. Occupancy also dropped by 4 percent to 70.5 percent, despite a 7.2 percent fall in the average rate of a room to $141. London fared somewhat better, managing a decline in occupancy of only 0.2 percent to 80.4 percent between January and September, $16 off the average room rate and a drop in revPAR fell of 7.4 percent to $162.

The strongest performing city in terms of revPAR, however, is Glasgow, down only 1.4 percent, with Edinburgh, Cardiff and Newcastle also holding up well. Hotels at Gatwick and Heathrow are showing some of the largest declines, with revPAR falling 22 percent. The decrease in passenger traffic is suppressing demand for hotel nights, and, according to BAA, passenger traffic at Gatwick fell 8.9 percent year-to-August as a result of the open skies agreement.

However, during the month of August, Gatwick grew its domestic and European traffic which, if sustained, should have a positive affect on hotel demand in due course. Heathrow’s passenger traffic dropped 2.6 percent year-to-August, but hotel performance has also waned due to the new room supply that entered into the market with the opening of Terminal 5 last year.