Market Reports

UK - The HotStats Hotel Confidence Monitor – Q4 2010

General manager confidence unaffected by negative economic forecasts

TRI Hospitality Consulting The latest HotStats Hotel Confidence Monitor shows that the London hoteliers are more optimistic than their Provincial counterparts, expecting an improvement in occupancy, rate and hotel profitability.
Despite slow economic recovery predicted for the UK in 2011, the confidence of UK hotel general managers remains strong during Q4 2010.  Looking towards the next three months, 56% of respondents are either optimistic or very optimistic about their hotels’ trading performance.
In the light of the negative economic predictions 38% of general managers who participated in the HotStats Hotel Confidence Monitor are planning to adjust their 2011 budget, of which 31% of respondents will alter their budget by up to 5 percentage points.
According to the latest HotStats Hotel Confidence Monitor, occupancy expectations for Q4 2010 are positive with 75% of general managers expecting an increase compared to Q4 2009. In London and the Provinces 83% and 55% respectively of general managers are expecting an improved occupancy performance. In particular, 45% of the London general managers expect an increase of between 2.5 and 5 percentage points.
London average room rate expectations for Q4 are extremely positive with 97% of general managers predicting growth. Provincial respondents are however more cautious, with nearly 60% expecting no change or even rate decline according to the latest HotStats Hotel Confidence Monitor.
“Hotel performance expectations and general manager confidence continues to improve in the UK, with London defiantly leading the way, but Provincial hoteliers nonetheless remain concerned about future market demand.” said Mark Dickens, managing director HotStats.
Additionally, 64% of the respondents are expecting an increase in total rooms revenue. London results are more positive with 94% expecting an increase in rooms revenue, with 58% of Provincial respondents also being positive.
Regarding this quarter’s gross operating profit (IBFC), 83% of the London general managers are expecting an increase, which is reflected in the latest October HotStats UK Chain Hotels Market Review where the GOPPAR in London grew by 16% in October. By stark contrast, however the Provinces suffered the biggest drop in year-on-year profitability levels since January 2010.
The levels of expectation for sales and marketing expenditure remain the same across the UK with only 17% of respondents intending to decrease their Q4 budget in comparison to 2009.   Of the general managers who completed the HotStats Hotel Confidence Monitor survey, 65% expect to maintain staffing levels during Q4 2010  compared to the previous year.

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