Cardiff, Birmingham and Edinburgh were among just five European cities where hotels managed to boost their profitability in 2002, according to the latest HotelBenchmark Survey from Deloitte & Touche.
The survey of 2,500 hotels in key cities across Europe, the Middle East and Asia Pacific found that operating profits dropped across Europe for the second year running, falling by 8%.
The strong pound contributed to a 9% fall in overall profitability for UK hoteliers. The star performer was Cardiff, where hotels boosted profits by 11%, as the city's growing reputation as a sporting and commercial centre allowed average room rates to rise.
Hotels in Birmingham and Edinburgh increased operating profits by 2%. London hoteliers, on the other hand, suffered a 12% drop in profitability as the reduced number of international travellers prompted them to cut rates to attract UKleisure guests.
Although German hotels saw operating profits plummet by 14%, those in the eastern German city of Leipzig bucked the trend and boosted profits by 14%. Profits at hotels in Moscow also grew by 14%. Outside Europe, hoteliers were able to increase operating profits by 7% across Asia Pacific and by 0.7% across the Middle East.
By Angela Frewin