More Trouble Ahead for UK Hotel Industry

The UK hotel sector can expect another tough year, as revenue per available room (revpar) and occupancy continues to fall, say consultants PricewaterhouseCoopers (PWC).

The UK hotel sector can expect another tough year, as revenue per available room (revpar) and occupancy continues to fall, say consultants PricewaterhouseCoopers (PWC). According to the latest report from PWC`s Hospitality & Leisure group, UK hotel performance is expected to deteriorate further this year, despite an increase in demand towards the second half of the year. Revpar during the year is expected to fall by 0.7% to £54.27, compared with £54.67 in 2001, with occupancy down by 0.1% to 72% and average room rate down by 0.6% to £75.28. However, PWC predicts that by 2004, the occupancy rate should have reached 77%, the highest since 1997. 

London’s hotels remain hardest hit by the downturn, says the report, with occupancy for the year expected to be at its lowest level since 1993. PWC says it expects occupancy to fall by almost 2% to 73.8%, compared with 75.2% in 2001.Average room rate in London will fall by 1.9% to £110.68 and revpar by 3.8% to £81.67. Demand at the capital’s hotels should start improving by 2003, says the report, so that by 2004 London could see record average room rates of £120.66 and revpar of £96.85. 

 

PWC expects revpar in the provinces to be flat in 2002 before recovering with 5.2% growth to £46.71 in 2003, and a further 6.3% growth to £49.66 in 2004. Occupancy, however is expected to fall by around 0.3% during 2002 to 71.2%, against 71.4% in 2001, before increasing by 2.8% in 2003 to 73.2%.

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