Hotel revpar will drop by 12.7% in 2009

London hoteliers will see a 12.7% year-on-year drop in revenue per available room (revpar) during 2009, Deloitte predicted today.

In its latest quarterly Hotel Market Outlook, the consultancy said the capital will see greater falls in revpar than in the regions, peaking in the third quarter, down 15.6% on 2008.

The overall outlook for London hotels in 2009 is expected to see a £12 fall in revpar to £82 driven by a 5.8% decline in occupancy and a 7.3% decrease in average room rates.

The outlook for 2010 suggests that revpar in the capital will suffer to a similar degree as 2009. However, average room rates are expected to lead much of the decline.

Regional UK hotels are not expected to suffer as much as those in London, with revpar falling 7.8%, as occupancy drops 2.9% and average room rates decline by 5.1%. Overall, revpar is expected to settle at £44 for the year.

Marvin Rust, hospitality managing partner at Deloitte, said: “If the UK hotel industry compares as closely (to falls in GDP) in this downturn with that of 1990 to 1991, revpar declines could be more dramatic than the model currently suggests.

“On the plus side, the decline in Sterling against source market currencies such as the Euro and the US Dollar will provide some stimulus for overseas visitors to come to the UK and London in particular. In addition, more of us will stay at home this summer.”

The outlook is produced using data from a sample of hotels collected by STR Global Limited. This data is input into a model developed by research firm, e-forecasting Inc, to produce hotel performance outlooks for the London and regional markets.

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By Daniel Thomas

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