London’s hotel mojo is back as occupancy rates rise, though pandemic recovery remains an ‘uphill battle’

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Wednesday, June 29, 2022 7:53 a.m.

London hotel occupancy rates are up, but not as fast as the industry expects.

Recovering occupancy rates and food and drink sales are rapidly fueling a recovery in the London hotel market, albeit slower than the industry had expected.

Fresh industry data by Hotstats and analyzed by RSM Hotels Tracker, which was shared with City AM this morning,

For the first time since before the pandemic, occupancy rates in London now exceed the rest of the UK, at 66.9%, topping UK rates by 68.4% in May, according to new data compiled by Hotstats and analyzed by RSM UK, which was shared with City AM this morning.

Revenue generated from the sale of food and drink has not only returned to pre-pandemic levels, but the revenue generation gap between London (£50.31 per occupied room) and the rest of the UK – at £41.97 per room occupied – widened.

“The continued growth in hotel occupancy in London has seen it overtake the rest of the UK, suggesting the city is slowly regaining its mojo,” Chris Tate, head of hotels and hospitality, said this morning. hosting at RSM UK.

Discussing the sector’s performance with City AM, Tate pointed out that “with China emerging from lockdown and international travel expected to come back strong in the summer months, this should further improve occupancy and bridge the gap between the pre-pandemic and future period”. rates.”

Average daily rates (ADR) for occupied rooms in UK hotels fell from £123.30 in April to £135.50 in May, topping pre-pandemic rates of £119.50 in 2019.

Revenue per available room rose from £77.30 in April to £92.70 in May, while London saw an even bigger increase from £32.00 to £140.10 in May.

However, occupancy rates recovered at a slower pace than expected.

This is partly due to the decline in international and business travel, which is also impacting UK high streets.

According to RSM UK’s analysis of Datscha data, attendance is 48% below pre-pandemic levels, driven by London (down 68%), Newcastle (down 67%) and Glasgow (in down 67%).

Tate pointed out that “the hospitality sector is currently facing a number of headwinds in the form of inflationary pressures, the cost of living crisis and consumer confidence hitting a new historic low in May.”

“As a result, the recovery will no doubt feel like an uphill battle for hoteliers,” he added.

“However, rather than succumbing to various economic pressures, many hotels are benefiting from the return of corporate hospitality and becoming more inventive in tapping into other sources of revenue such as food and beverage,” Tate concluded.

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