Mixed fortunes for UK hoteliers in volcanic ash cloud fallout

24th May 2010
Mixed fortunes for UK hoteliers in volcanic ash cloud fallout

London hotel occupancy suffered in April as the ash cloud prevented visitors from travelling to the capital. The regions fared slightly better on the occupancy front, but overall rooms yield was down as hoteliers reduced rates to tempt those stranded to stay on with them, according to preliminary monthly figures released today by PKF Hotel Consultancy Services.

In the capital, occupancy was down 7.6% from 82.5% last April to 76.3% this April. This is quite a sharp decline and suggests many London hotels lost out from bookings falling through as a result of the ash cloud. There would have been some balancing with new bookings from those stranded, however the figures suggest the difference was not entirely made up. Room rate increased an equally sharp amount, possibly as a result of lost volume business (at a lower room rate), for example conferences and tour groups, which would have the overall effect of enhancing the average room rate. Nevertheless, rooms yield declined by 0.3% from £93.46 to £93.20. 

In the regions the picture was slightly different. Occupancy was up by 1.7% from 66.9% to 68.1%, room rate was down 3.6% to £58.11 while rooms yield dropped by 2.0%, compared to the same time last year, to £39.54.

Increases in occupancy were seen in cities such as Manchester and Birmingham which means these hotels benefited slightly from those stranded at these airports last minute. The increases also partly reflect recovery from the downturn in 2009; occupancy in Birmingham increased by 4.0% to 67.8%, room rate increased by 5.6% to £61.03 and rooms yield increased by 9.8% to £41.36.

In Manchester, occupancy increased by 2.3% to 73.1%, room rate decreased slightly, by 0.7% to £74.39, and rooms yield increased by 1.6% to £54.37.


Robert Barnard, partner for Hotel Consultancy Services at PKF, commented, “As expected, the ash cloud impact was both positive and negative for hoteliers. Overall, the effects have not been too dramatic with the capital suffering the most. The year to date figures for London remain positive however, rooms yield is up 7.8% on the same period last year.

“Hopefully the negative impact will be short lived, however as the volcano continues to erupt, there is still a great deal of uncertainty for hoteliers and travellers.”


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