Hoteliers in London recorded another month of yearon- year decline in profit per room as total revenue levels in the capital dropped for only the second time in 2011, according to the latest HotStats survey of approximately 550 full-service hotels across the UK by TRI Hospitality Consulting.
Whilst hoteliers in London continued to achieve growth in achieved average room rate, with November representing the 25th consecutive month of growth in this measure, the recent trend of room occupancy decline persisted with a 1.9 percentage point drop. That said, volume in the capital remains strong with the city achieving a room occupancy of 82.6 per cent.
The growth in achieved average room rate in London was in spite of an uncharacteristic decline in the traditionally robust corporate (-1.4%) and leisure (-3.4%) sectors for the city, suggesting a softening of these markets. In contrast, average rates in the conference sector grew by 13.2% to £162.07 for November.
As a result of the movement in room occupancy and achieved average room rate, the London hotel market suffered only a slight decline in Revenue per Available Room (RevPAR) for November, of 0.2% to £114.98. However, Total Revenue per Available Room (TrevPAR) levels in the capital were negatively impacted by a decline in revenue in the ancillary departments, including food and beverage (-2.2%) and meeting room hire revenue (-3.9%) per available room.
The 1.4% year-on-year decline in TrevPAR for the month was further exacerbated by a 0.2 percentage point increase in payroll levels, to 22.2% of total revenue from 22% in 2010. As a result of the movement in revenue and cost levels in November, profit per room for the month declined by 2.4% to £82.12. “Whilst for much of the year the London hotel market appeared infallible, it is sobering to know that one of the strongest markets in Europe and the world is susceptible to the ongoing global economic challenges.
That said, due to a strong period of operation in the first nine months of the year, it is unlikely that the decline in headline performance levels in recent months will prevent the city from achieving a second consecutive year of strong growth in profit per room,” said Jonathan Langston, managing director of TRI Hospitality Consulting.
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TRI Hospitality Consulting provides a wide range of services to clients in the hotel sector. It has offices in London, Dubai and Madrid.
For more information contact:
Jonathan Langston, managing director 020 7892 2201
David Bailey, deputy managing director 020 7892 2202
Charles Scudamore, director 0207 892 2211
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