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Trading remains tough for UK hotels

Preliminary UK hotel data released by STR Global confirms that hotels throughout the UK experienced difficult operating environments in January.

The results are universally in negative territory, however performance levels were not as poor as expected given the current economic conditions. The UK overall saw a decline in RevPAR between 10 percent and 12 percent split fairly even between rate and occupancy.
Regional UK, i.e. everywhere excluding London, fell between 10 percent and 12 percent, with the capital itself falling between 11 percent and 12 percent.

Commenting on the data, James Chappell, Managing Director of STR Global said,
“Given the current doom and gloom in the wider economy, we could have expected far worse results than we are actually seeing. Forecasts and budgets are universally down, but what we are seeing is a movement between market segments rather than a wholesale stop in travel which is promising. Airport hotels are naturally the worst affected at what would otherwise have been a strong period, with carriers at Heathrow and Gatwick cutting flights and this is having a knock on effect to the secondary markets such as Reading and the whole M4 corridor.”

“We are beginning to see the signs of rate coming down and the downward movement in many markets is the strongest indication yet that the so called special corporate rates that the hotels offer are coming under pressure as clients shop around. Hotels are also experiencing very late pick up for business, which makes any kind of forward planning extremely difficult,” added Chappell.

In the rest of the UK, Liverpool and Manchester are down between 17% and 19% and 13% to 15%, respectively, whereas Edinburgh and Glasgow fell between 5% and 7% and 7% to 9%, respectively.