Research: A record year for UK hotels

As the clock struck twelve on 31 December 2006, UK
hoteliers should have been cracking open the champagne as they took stock of a very
successful year, say PKF hotel consultancy services. December?s preliminary data
confirmed that 2006 was a record year with UK hotels
achieving their highest rooms yield growth rate for a decade.

In London, the average daily rooms yield for 2006 was 16.8% higher than
the 2005 figure of £79.84 an annual growth rate not seen since 1985.
Adjusted for inflation, the rooms yield of £93.28 reported by London
hotels is the highest since 2000. Strong demand for hotel rooms in the
capital drove this exceptional performance with both average daily room
rate and occupancy rising by 7.2% and 9.0%, respectively.

Marketing campaigns by London hotels and promotional offers from airlines played
important roles and may have been instrumental in the 15.7%
increase of visitors to London -particularly from Eastern Europe, the
Middle East and the emerging markets of Asia including China. Undeterred
by the weakness of the US dollar in 2006 and empowered by greater wealth - helped by
high energy prices - these visitors helped fill the rooms of
first class and deluxe hotels in the capital which were traditionally
occupied by North American and Japanese tourists.

In the regions there was a similarly strong performance in 2006 with rooms yield
growth of 4.6% - the highest rate since 1998 - to £52.28 compared to
£50.00 in 2005. Adjusted for inflation, rooms yield for regional hotels in
2006 is also the highest since 1998. This is due to higher average daily
room rate and occupancy - up 2.4% and 2.1% respectively in 2006 compared
to 2005. Strong demand for hotel rooms from both domestic and
international business travellers was an important driving factor towards this
impressive performance, as were the various local events and
conferences across the regions that draw in additional leisure visitors.

Robert Barnard, partner for hotel consultancy services at PKF, said: We
predicted earlier in the year that 2006 would be an impressive one for UK hotels,
but our predictions are conservative compared with the final


Looking forward to 2007, it looks likely that the UK hotel market will
see continued growth. To quite what levels however, is dependent on the
economy, politics and events worldwide. With UK interest rates on the rise and
another hike expected, the spectacular growth rates seen this year are likely to be
toned down in 2007.

Preliminary year to date figures for 2006
Rooms department
% change
UK Regional hotels (501)

Average daily room rate per occupied room
Average daily room occupancy
Average daily rooms yield per available room
London hotels (173)


Average daily room rate per occupied room
Average daily room occupancy
Average daily rooms yield per available room