The Commonwealth games and Golf Open Championship have given a much-needed boost to the UK`s regional hotel industry, according to preliminary figures released today from the HotelBenchmark Survey by Deloitte & Touche. In July, regional hotels reported positive occupancy growth for the first time this year, up seven percent from June and 0.7% over last year, to reach 75%. This growth combined with a small improvement in average room rate resulted in revPAR* rising 0.9 percent.

July`s performance increase follows a difficult first half for the industry, as hotels continued to suffer from the fall in overseas visitors. Preliminary year to date figures reveal hotel revPAR down 3.3% on the same period last year. July`s growth is largely the result of increased demand stemming from the Commonwealth Games, the Golf Open Championship, and to a lesser extent, the Farnborough airshow.

Occupancy levels in Manchester exceeded 80% as an estimated one million visitors descended on the City (the last time the market traded at this level was October 2000. This compares with 68 percent the previous month and 76 percent in July last year. RevPAR rose by 17.5 percent

Edinburgh was the only other city to report double-digit revPAR growth. The market benefited from the 131st Golf Open Championship held between the 18-21 July at Muirfield. As a result of increased demand, occupancy levels in the Scottish capital rose 7.6 percent whilst gains of 13.7 percent were reported in average room rates. A similar phenomenon occurred during the 130th Golf Open Championship, which was held at Lytham St Annes, where all Lancaster hotels reported a 34.3 percent increase in revPAR driven by a 25 percent rise in average room rates combined with growth in occupancy of 7.4 percent.

Likewise, the Farnborough airshow has bolstered the performance of Hampshire hotels, with all hotels in the county reporting a 9.0 percent increase in revPAR on last year, driven by a 3.3 percent increase in occupancy and matched by 5.6 percent growth in average room rates.

Julia Felton, Director, said, “Sporting events can have a huge impact on hotel performance. As the largest such event ever to be staged in the UK, the Commonwealth games in particular was a welcome lift for the industry. That said, many hotels in Manchester were not as busy as they had initially anticipated, with rooms available in the first weekend. This may be due to a fall in demand from other traditional markets, as people assumed the hotels would be full and room rates higher than usual. Yet Manchester`s success in hosting the games bodes well for the future in drawing the world`s attention to the UK as a sporting and tourist destination, as well as possibly paving the way for an Olympic bid in 2012.”

Other key findings:

- Average room rates for regional hotels have fallen 8.8 percent in the first seven months compared with 2001, causing revPAR to fall 11.5 percent.
- An analysis by average room rate shows that UK hotels with an average room rate of under £50 have managed to improve average room rates by 2.2 percent during the first seven months of the year. However, hotels with an average room rate of over £75 have witnessed a 6.4 percent fall in room rates. As a result, the under £50 segment is the only one to have experienced any revPAR growth in the seven months to July 2002.

The HotelBenchmark Survey by Deloitte & Touche tracks the performance of over 1,200 hotels in the UK making it the most comprehensive survey of UK hotel performance. In addition to its UK focus, the survey tracks the performance of some 6,000 hotels across 300 markets globally on a monthly basis. Participants of the survey can access the results online at www.HotelBenchmark.com. For more information please contact Lorna Clarke at [email protected].
Deloitte & Touche is the UK`s fastest growing major professional services firm in 23 locations, with over 10,000 staff nationwide and fee income of £713.6 million in 2001/2002. It is the UK practice of Deloitte Touche Tohmatsu, a global leader in professional services with over 100,000 people in 140 countries and fee income of $12.4 billion for the year ended 31 May 2001.
Authorised by the Financial Services Authority in respect of regulated activities.
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