RevPAR in London’s hotels rose 6% in Q2 2019 on the back of visitors travelling to the capital to watch the ICC Cricket World Cup and the Major League Baseball.
This is according to the latest UK Hotel Market Tracker: Q2
2019, produced by HVS London, AlixPartners and STR.
On the back of both major sporting fixtures London’s hotels saw average room rate rise 5.6% to £156.89 year-on-year, with occupancy up 0.6% to 84%.
It was a different story in the regions, however, despite a number of the cricket fixtures being held in Birmingham, Manchester and Southampton. Outside the capital RevPAR was down by 0.9% for the quarter, average room rate fell 0.6% to £73 compared with the previous year, and occupancy was down 0.3%. This was the second consecutive quarter that RevPAR has decreased in hotels outside London.
“Unfortunately these fixtures were not enough to boost occupancy sufficiently in hotels outside London. The combination of top line retraction, cost pressures and continuing new supply is still putting significant pressure on regional hotel margins,” commented HVS chairman Russell Kett.
The pipeline for new hotels in London currently stands at 10% as a percentage of supply, with a 6% active pipeline for the regions.
“With revenue declining, costs increasing and a strong active pipeline operators are likely to struggle to increase profitability, particularly in locations outside the main tourist hubs, and those not benefitting from robust corporate activity,” he added.