The UK’s performance in Q3 has been particularly strong, according to HVS London’s quarterly hotel bulletin.
All but two cities reviewed showed RevPAR gains with an average of eight percent increases. This converts to a profit rise of three percent year-on-year.
“We are now confident enough to say that the recession in the UK’s hotel sector is effectively now over based on year-on-year growth to both revenue and profitability,” says Tim Smith, HVS London director. “Performance has been strong in the regions, with hotels in Aberdeen, Bath, Belfast, and Edinburgh recording double digit RevPAR increases in Q3.”
Performance in London also shows growth. Although hotels have recorded a three percent decline in RevPAR, demand has grown at a greater rate than supply. Only average rates have failed to match the one-off levels seen during the Olympics.
“The key issue is that confidence has returned to the market, because trading and profits have risen. That confidence is shown by more bank debt available, more transactions, and an improved trading situation at the hotels. Therefore, we are definitely out of the worst and in a period of recovery,” adds Smith.
Rather than seeing tourist volume slump post Olympics, as other host cities have done, early signs are that the UK has benefited from the games with the number of overseas visitors stabilizing and then accelerating again this summer.
In terms of new hotel openings in the UK, budget hotels and limited service operations are still being favored by developers⎯⎯accounting for 67 percent of total new openings in Q3.
