Opinion

London Hotels Feel Impact of Summer's End

London hotels are feeling the impact of the end of the summer's euphoria, according to the latest figures from HotStats. In November, declines were noted across all headline performance measures, with profit per room falling by 5.6 per cent.

In the survey of approximately 560 full-service hotels across the UK, the penultimate month of 2012 was identified as being even worse than November 2011, which experienced a profit per room fall of 2.4 per cent. However, the greatest drop in gross operating profit per available room came in June, at 5.6 per cent, throwing up questions about the true impact of the Olympics and Jubilee on the hotel sector's summer performance.

Other headline variables have not been able to offset November's poor performance either. Despite a 1.4 per cent year-on-year increase in food and beverage revenue to £35.50 per available, a two per cent total revenue per available room was noted, with a three per cent decline in room revenue and a 7.1 per cent drop in meeting room hire revenue per available room.

A 0.1 percentage point increase in the proportion of demand for residential conference sector units occurred in November, but this was still weaker than the year previous, with rates declining by 7.9 per cent to £148,660 over the year. Falls were also noted in the nondiscounted best available rate (-7.2 per cent), leisure (-2.6 per cent) and groups/tours (-6.7 per cent). This contributed to the average room rate decrease of 2.7 per cent.

Jonathan Langston, managing director of TRI Hospitality Consulting, stated: "Not even a three per cent increase in the number of visitors to WTM (world travel market), to almost 29,000 trade visitors, was enough to save face for hotels in London and the drop in achieved average room rate for November was the greatest year-on-year margin of decline in this measure in 2012. 

"London hotels suffer second worst profit decline of 2012. Although volume remained strong in the city and hotels in London are undoubtedly on course to achieve a third consecutive year of profit growth, it is unlikely that hoteliers will be popping champagne corks as they look to more challenging times ahead."

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