Profitable growth has returned to Great Britain in Q2 for the first time on a last twelve months basis since the downturn, according to HVS London. Both London and the rest of the UK recorded RevPAR increases this quarter⎯⎯albeit following weak comparators in the previous quarter. 

Input costs have generally increased, although staff-restructuring schemes have begun to result in significant payroll savings. Compared to 2012, new supply levels in the second quarter remained subdued. The low supply levels are not indicative of the longer-term trends in market size, with 28,092 bedrooms remaining in the active pipeline.
Following a flat first quarter, RevPAR in London increased by 5 percent in Q2. This increase has been exaggerated by the absence of Diamond Jubilee celebrations⎯⎯which in June 2012 led to a RevPAR decrease of 7 percent compared to the previous year. Excluding this effect, performance metrics in London remained flat. 

New openings⎯⎯totaling 1,572 bedrooms⎯⎯remained at a low level in Q2 in comparison to the high levels of new supply experienced in 2012. Both Travelodge and Premier Inn continued to expand, opening 253 and 367 bedrooms in the quarter respectively. The two hotel groups now have 88,647 bedrooms in the UK⎯⎯equating 16 percent of the UK hotel market.

Notable openings in the second quarter included the 224-bedroom Holiday Inn Express Birmingham Snow Hill following the $36 million conversion of Kennedy Tower by Sanguine Hospitality. This marks the first new opening since the acquisition of Sanguine by Interstate and demonstrates the develop-to-manage strategy. The 91-bedroom Park Inn Glasgow also brings the UK Park Inn portfolio to 22 hotels and marks a return to the city for the brand after a two-year absence.
