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UK hotels sees light at end of recession tunnel

UK hotels are starting to see the light of the long dark tunnel, according to new research from business advisory specialist, Deloitte.

Whilst revenue per available room (revPAR) remains negative, the pace of decline is reducing and some markets are showing gains on 2008 numbers with strong leisure demand driving up weekend occupancies and revenues, say the new figures. There is also a trend of improving performance in the weekday corporate business market in London.Marvin Rust, Hospitality Managing Partner at Deloitte, commenting on the analysis said: “The UK tourism industry continues to be challenged by the recession, with some companies announcing record losses and year-to-April revPAR, the hotel industry’s leading performance indicator, down 11.1%.
“However, our analysis shows that both weekend leisure demand in London and the Regions and corporate weekday demand in London over the past five months has shown an upward trend, signalling that the worst may be over for hoteliers,” he added.
Weekend leisure demand is driving the recovery with much stronger performance than corporate weekday demand. RevPAR was down 3.8% to £54 on the weekend while weekday drops were more severe, down 14.6% to £58 from 1 January through to 20 May 2009. However, some cities actually saw increases in weekend leisure demand during the period including Glasgow (4.3%), Edinburgh (3.4%) and London (0.3%). In this tough operating environment this is a great achievement.
Rust added: “Although the results for corporate weekday demand in London look weak with a decline of 11.0%, the trend is definitely upwards over the last five months. Clearly one of the factors driving the upward trend across the country is the increasing number of Brits taking short breaks in the UK, where Sterling stretches further than in Europe.
“The strong Euro against Sterling has also made the UK less expensive than in the past, which is helping hotels perform better and walking around London there are a noticeable increase in the usual number of European accents in the shops and at London’s attractions.”
The only areas yet to show an improvement are weekday demand in the Regions and the country’s airport hotels where trading continues to be tough.