UK hotel performance on the up

The UK hotel industry’s 2006 resurgence was firmly ratified over the

  summer as the sector recorded its best ever performance figures since

  the Millennium. In this article, Robert Barnard, partner for hotel

  consultancy services at PKF, takes a look at how hotels around the UK

  shone during one of the UK’s hottest summers.


p>  After a strong start to 2006, the London hotel market took off over the

  summer months of June, July and August. While rooms yield improved

  across all segments of the market, luxury, first class and boutique

  hotels performed particularly well with Year to Date increases on 2005

  reaching 20.1%, 22.6% and 21.0% respectively. The first class and

  boutique hotels also achieved the highest increase in occupancy during

  the year with average occupancy up 17.7% for first class hotels and

  13.9% for boutiques.


  Over the summer months, London hotels were boosted by a number of major

  events such as the London Venue Expo exhibition, EuroPride London and

  the London Dance Week Festival in June; The Wimbledon Championships, the

  British International Air Show and The Farnborough Air Show in July; and

  The Proms and the Great British Beer Festival in August. The summer

  opening of the State Rooms at Buckingham Palace and the Houses of

  Parliament summer opening also brought tourists of all nationalities to



  Although some of the staggering performance figures such as the 26.3%

  increase in occupancy in August should be viewed in the context of the

  aftermath of the 7/7 bombings in 2005, nothing can detract from the

  innate strength and impressive performance of most hotel market



  Domestic visitors returned to London during the summer of 2006 reviving

  the fortunes of tourist hotels (under £75 average room rate) whose rooms

  yields increased by 7% in June, 21.8% in July and 32.4% in August. The

  percentage of European visitors staying in tourist hotels also rose by

  23% in July and 3.8% in August while North American visitor numbers to

  London hotels were also boosted in July by 34.9% (first class), 22.5%

  (business) and 31.6% (tourist). In contrast, the number of Japanese

  tourists staying in all classes of London hotels fell during the summer

  months with the exception of an increase of Japanese visitors to de luxe

  hotels in June.



  Compared to the record-breaking figures for London hotels, regional

  hotel performance overall improved at a more modest and stable rate over

  the summer although locations such as Aberdeen, Bournemouth and Heathrow

  & Slough had a sizzling summer.


  Major local events such as the Highland Games in June and the Edinburgh

  Festival in August ensured a strong performance for Scottish hotels

  while the 2006 British Open Golf helped Liverpool hotels to raise their

  room rates by a third in July.


  Not surprisingly, given the long run of hot weather, Bournemouth hotels

  had a great summer - largely as a result of high occupancy rates

  throughout the period and increases in room rates of 12.5% in June,

  10.8% in July and 8.7% in August. Events such as the Bournemouth Live!

  Festival and annual trade union conferences in June followed by the

  school holidays kept the town’s cash registers ringing throughout the



  Airport locations such as Heathrow and Gatwick were more than 90% full

  during June and July and Heathrow hotels also managed to increase their

  room rates by 8.6% in July to £73.82. The airport terrorist scares in

  early August also helped to raise occupancy levels in hotels at

  Heathrow, Gatwick and Birmingham airports during the month.


  Robert Barnard, partner for hotel consultancy services at PKF, said:

  “The summer of 2006 will be remembered by most UK hoteliers as a good

  one albeit for different reasons. For seaside resorts, the long, hot

  summer helped to keep domestic holidaymakers in the UK; the delays

  created by the terrorist bomb alerts generated additional August income

  for airport hotels; while major cultural and sporting events throughout

  the summer brought visitors to all corners of the UK.


  “The significance of breaking through the performance markers set in the

  Millennium year cannot be underestimated. Hotel Britain has had to

  weather some extremely difficult trading conditions since that time but

  it has come through with flying colours - testament to the resilience of

  our hoteliers, the professionalism of management and the UK’s inherent

  appeal from both the business and tourism perspectives. The key issue

  now is, of course, how long can this be sustained? “