UK Chain Hotels Market Review – March 2013

The London hotel market experienced a gross operating profit decline of 7.3 per cent in the first quarter of 2013, according to the latest HotStats survey.

In the first three months of 2013, RevPAR (Revenue per Available Room) and TRevPAR (Total Revenue per Available Room) performance declined by 3.4% and 2.5%, respectively, when compared to 2012 performance.
Whilst demand levels have remained relatively robust, London hotels are attracting a higher proportion of lower yielding leisure and group tour demand than relatively higher-value commercial demand. Furthermore, average room rate performance declined in all market sectors with the exception of corporate- related demand, which remained stagnant.
First quarter GOPPAR performance reduced in all sectors of the London full-service hotel market (ie three, four and five-star hotels). The greatest GOPPAR percentage decline was experienced in the four-star sector (-9%) as total departmental profit per available room dropped by 5.4% in the first three months of 2013. The capital’s five-star and three-star sectors experienced GOPPAR declines of 8.7% and 7.8%, respectively, over the same period. 
March performance was not particularly strong as average room rate performance declined by 4.3% TRevPAR by 3.2% and GOPPAR (Gross Operating Profit per Available Room) by 6.6%. Despite London hoteliers being able to maintain a stable cost base the decline in revenue performance, primarily due to a decrease in rate performance in all sectors impacted revenue and profit performance. 
“The first quarter is typically the most challenging operating period for London hotels; however from a broader perspective the fact that demand levels remain robust despite London experiencing an increase in supply of over 11,000 bedrooms across all sectors since 2010 is more encouraging news,” said Jonathan Langston, managing director at TRI Hospitality Consulting.
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TRI Hospitality Consulting provides a wide range of services to clients in the hotel sector. It has offices in London, Dubai and Madrid.

For more information contact:

Jonathan Langston, managing director 020 7892 2201

David Bailey, deputy managing director 020 7892 2202

Charles Scudamore, director 0207 892 2211