Breaking Travel News
London sees slight fall in hotel occupancy

London sees slight fall in hotel occupancy

Hotels in London saw RevPAR growth of 0.9 per cent in quarter four of 2019, to £135.25, when compared with the previous year.

However, average occupancy for hotels in the capital dropped back slightly in the final quarter of the decade, to 84.8 per cent.

Average rates rose 1.9 per cent to £159.53.

That is according to the UK Hotel Market Tracker: Quarter Four 2019, produced by HVS London, AlixPartners and STR.

Regional hotels in the UK saw RevPAR fall in the quarter, down 2.7 per cent to £50.73, while occupancy was down marginally to 73.6 per cent.


At the same time, room rates fell by 2.1 per cent to £68.94.

“Softening occupancy will be a concern in London, particularly given the high number of hotel projects in the pipeline, although the fact room rates have risen by nearly two per cent is encouraging,” commented HVS London chairman, Russell Kett.

“Any improvement in yields will take longer to reach provincial hotels, but they should start to see some change as we move through 2020.

“However, the active hotel pipeline, currently at six per cent of supply outside London, will continue to prove challenging as it will in the capital.”

With greater political certainty coming from the general election, transaction volumes in London saw an increase in quarter four to a value of £1.5 billion.

However, transactions in the regions were down 38 per cent, to £2.2 billion.

The largest transaction in quarter four was the sale of the 211-room Fairmont St Andrews golf resort in Scotland to Great Century for a reported £135 million.

Moving forward, investors are expected to be cautiously optimistic about a resurgence in transaction activity.

“The recent UK election result and the ensuing Brexit decision is likely to make the UK more attractive to many investors,” commented Kett.

“This is likely to have a more immediate impact on transaction yields in London during 2020, although any improvement may be tempered by the pipeline of luxury hotels in inner London.”