Foreign shoppers boost profitability at London hotels

A flood of shoppers from France, China and the Middle East helped drive up profitability in London hotels during May, according to the latest HotStats report from Tri Hospitality Consulting.

The influx of shoppers taking advantage of the good weather and the favourable exchange rate on the pound returned the capital's hotels to the levels of profit growth they enjoyed during the first quarter of the year, before the volcanic ash cloud grounded flights across the UK during April.

Gross operating profit per available room (goppar) soared by 10.7% to £66.44 in London, while revenue per available room (revpar) grew by 9% to £98.88.

Occupancy advanced by 1.9 percentage points to 83.1% (the highest level of the year to date) but the biggest driver of growth stemmed from a 6.6% hike in average room rate to £119.06.

May also provided regional hotels with their first month of growth in profitability this year.

Goppar rose by 2.2% to £32.64 in the regions while revpar increased for the first time since July 2008, by 5.3% to £50.52. This was achieved on the back of a 2.8 percentage point rise in occupancy (to 72.6%) and a 1.2% increase in average room rate, to £69.59.

Although the ash cloud and industrial action slashed passenger numbers at Heathrow Airport by 320,000 (or 6% of all traffic) during May, demand from stranded passengers enabled Heathrow hotels to increase occupancy by 10% (to 82.7%) and average room rate by 3.3%. As a result, revpar soared by 16.8% to £58.42.

The British Airways Authority estimated that the ash cloud lost it an overall 445,000 passengers during May. It estimated the year-on-year decline in passenger numbers to be 2% at Stansted, 3% at Southampton, and 6% at both Glasgow and Edinburgh.

TRI HotStats: monthly UK hotel figures >>

Ash cloud created many extra hotel bookings than cancellations, says Pegasus >>

London hotels bounce back but provincials still struggling >>

By Angela Frewin

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