Riots cause drop in London hotel occupancies, but rates continue to rise

Last month's riots sparked the first decline in London occupancy since February, according to figures released by PKF Hotel Consultancy Services.

In August, occupancy in London decreased by 3.2% compared with the same month last year. However, a 9.5% rise in room rate meant that room yield still increased by 5.9% to £101.66 from £96.02 in August 2010.

Meanwhile, hoteliers in the regions enjoyed one of their strongest months this year, with a 2.4% increase in occupancy and a 2.5% rise in room rate resulting in rooms yield growth of 4.9% from £49.41 to £51.82.

Manchester and Edinburgh performed particularly well, with year-on-year rooms yield rises of 8.8% and 10.5% respectively.

Robert Barnard, partner for Hotel Consultancy Services at PKF, said that the riots affected London hotels as visitors decided to stay away or shorten their breaks in the capital.

"Although occupancy remained above the important 80% benchmark, the decline in guest numbers bucks the trend seen earlier in the year and only skilful revenue management enabled hoteliers to avoid a drop in yields during their peak season," he said.

"With London now projecting a much more positive image again, we are optimistic that the challenges have been short term in nature and that normal service will be resumed in September.

Barnard said the data highlighted that hotels in the rest of the country posted some of their best results to date last month.

"Despite the dismal weather, families decided to spend the summer season in the UK as they continue to grapple with an uncertain economic outlook and unfavourable exchange rates," he said. "The popularity of the staycation has endured for another year and, given the lack of any meaningful economic recovery, it is hard to see anything but a continuation of this trend in summer 2012."

London drives UK hotel recovery, says PKF report >>

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By Janet Harmer

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