London hotel occupancies have returned to boom levels, according to preliminary data from Deloitte.ÊÊ The HotelBenchmark Survey shows that occupancies averaged 74 percent in the first quarter of 2004, up eight percent on the same period last year.Ê This level beats the 73 percent recorded in quarter one of 2001, before the downturn began eroding hotel performance.Ê
Marvin Rust, hospitality managing partner at Deloitte, commented: “Occupancies were always going to be higher than last year when war compounded the already difficult trading conditions but the level of growth is far greater than expected.Ê As occupancy levels approach 80 percent over the peak months ahead, room rates will begin to move significantly exacerbating the upward trend in performance seen in the first quarter.”
The average room rate for London hotels in quarter one was £89, £5 higher than last year.Ê Revenue per available room (revPAR) reached £65, an increase of 14 percent on 2003.
The higher end of the market enjoyed the greatest improvement in performance.Ê Hotels with average rates of between £160 and £200 recorded a staggering revPAR growth of 31 percent to reach a revPAR level of £112.Ê This increase was due largely to a 28 percent increase in occupancy levels, from 52 percent last year to 67 percent in 2004.ÊÊ
Marvin Rust commented, “The top end of the market is the most cyclical so the improved economic environment will have helped lift the performance of these hotels but the huge level of occupancy growth also suggests hoteliers are finding innovative ways to attract visitors.Ê With a number of hotels in this bracket having recently changed hands, the strong performance will be extremely encouraging for the new owners.”Ê
Other main findings
The fresh and innovative approach of boutique hotels continues to attract a following. Occupancy levels in these hotels rose by 19 percent in the first quarter and revPAR by 23 percent.
The UK’s regional hotel industry has shown the first improvement in quarter one performance since 2001. RevPAR rose 6 percent on last year to reach £39.Ê This compares with the quarter one peak of £41 in 2001.