Autumn and winter will be crucial for hotels after slow August

Hotels face increased pressure over the coming months after trading results revealed a disappointing August.

Research from hotel consultancy PFK found that a decrease in room rate in August resulted in a slow end to the summer – with revenue per available room (revpar) being held down by a slide in room rates and revpar.

In London, room rate was down 7.0% on the same month last year from £109.77 to £102.07. Occupancy also dropped, by 2.3%, from 83.7% last year to 81.8% this year and revpar was down 9.2%, from £91.96 to £83.53.

In the regions, revpar was down 11.0% from £49.57 to £44.10. This was largely as a result of an 8.0% decrease in room rate from £66.19 in 2008 to £60.91 in 2009. Occupancy also dropped, by 3.3%, from 74.8% to 72.4%.

Year-to-date figures for both London and the regions painted a similar picture, with revpar down 7.7% from £96.04 to £88.63 and 13.3% from £48.76 to £42.27 respectively.

Robert Barnard, partner for Hotel Consultancy Services at PKF, said, “This year was always going to be a tough one for hoteliers and therefore these figures are not hugely surprising.”

In light of this, autumn will be a critical time for hotels as the sector faces the drop-off in summer leisure spend and looks for a return of corporate and events business.

Richard Hathaway, KPMG’s Head of Travel, Leisure and Tourism highlighted the importance of a diligent approach, commenting: 

“A continued tight rein on costs and cash will be critical in the coming quarter. Many will find that the their traditionally strong autumn and Christmas revenues from business travel, conferences and events does not return this year and as a result their businesses will remain under severe pressure for the foreseeable future.  Indeed recent research indicates that the sector is not expecting an increase in conference and meeting bookings in the coming year. 

Hathaway added that while an expected surge in business insolvencies in the autumn would see hotels likely to suffer, the festive period should provide a leisure trading boost, but warned that it will be increasingly crucial “as traditionally weak trading in January and February may call time for some.”


Weekly revpar slides by 13.2% in London and 17.6% in the regions >>

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Top Hilton executive quits after just 18 months in the job >>

Hotels still investing despite credit crunch >>


By Rosie Birkett

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