London hotels have started to feel the effects of the terrorist outrages of 7 July but there have not been the widespread cancellations in respect of the business travel market that everyone had feared. However, it seems likely that some leisure visitors are postponing their trips until they feel a greater sense of safety.
According to daily hotel operating data provided by The Bench with some 28,000 rooms contributing data, London’s upscale hotels experienced a fall in weeknight occupancy (Monday - Thursday) of around 5-6% last week (11-14 July) over levels achieved in the same week last year. But for weekend occupancy levels, when most visitors are staying for leisure purposes, the fall in occupancy has been more marked at around 10-12% below last year’s levels, but even more significantly against weekend occupancy levels from the period immediately before 7 July.
“So far, The Bench data shows that London hotels have been able to maintain their average room rates at broadly similar levels as the same period last year, although at a lower level than they had been able to achieve immediately before 7 July,” commented Russell Kett, managing director of specialist hotel real estate consultants, HVS International.
“The immediacy of The Bench data is an invaluable resource for hoteliers to monitor the situation closely and be able to react sensibly to this current downturn in their business. Hopefully this will help hoteliers to avoid wholesale discounting when it is not needed and to use focused, tactical pricing offers to help stimulate demand,” he added.
Commenting on the data, James Chappell, CEO of The Bench, observed that London’s hoteliers need not be panicked into taking action which will destroy the hard work they have done to maintain their occupancy and room rates this year.
“If people are genuinely concerned about coming to London, it is unlikely that lower prices alone will persuade them. Providing there is no recurrence of these tragic events, people’s confidence will gradually be restored, helped by the underlying demand for tourism to London,” he concluded.
HVS International is a leading firm of global real estate advisers focused exclusively on the hospitality sector. The Bench is the leading supplier of daily hotel market information in Europe.