UK Chain Hotels Market Review - January 2006
Room revenue per available room rose by a healthy 4.4 per cent during January 2006 compared to the same month a year ago, according to the latest figures from TRI Hospitality Consulting's HotStats survey.
London hotels were particularly strong with a rise of 6.3 per cent. The improvement in the UK capital was driven both by rate and occupancy. Room rates increased 4.1 per cent to £93.11 and occupancy was up 1.5 percentage points to 71.6 per cent.
It is a particularly creditable performance given that the current inflation rate (Consumer Price Index) is 1.9 per cent.
'Although good news, it is too early to predict a bumper year ahead. January is one of the least significant months in terms of hotel trade,' said David Bailey, director of TRI Hospitality Consulting.
The figures for hotels in the provinces were also good, although the increases were less than for London.
Occupancy in the provinces was slightly up with a 0.3 percentage point increase to 57.7 per cent and room rates were up 2.7 per cent to £66.75. This led to a room revpar increase of 3.2 per cent.
'Sales are heading in the right direction but hoteliers are also fighting against severe cost pressures, particularly due to rising energy prices. Data from the full HotStats survey showed that profit was down 4.3 per cent for the month,' said Bailey.
Other data mixed on improving sales prospects at hotels
National Statistics, the Government agency, reported in February that overseas visitor numbers for the three months to the end of December were up three per cent. For the whole of 2005, the increase was eight per cent.
In the three month period, the main increase (14 per cent) was from countries outside both Western Europe and North America.
The North American market, traditionally one of the higher spenders, showed a decrease of two per cent. Despite this, the amount spent by visitors to the UK overall was up 10 per cent to £3.52bn.
These official Government figures are contradicted, however, by UKinbound, the official trade body representing the inbound tourism industry. It found that visitor numbers were down 1.3 per cent during December 2005 compared with a year earlier. Forward bookings were also down, by 0.6 per cent.
The trade body said that the range and quality of the UK offering to tourists has never been better but the high cost of operating in the UK, mainly through taxes and compliance costs, is undermining the industry's ability to win business.
Figures from BAA, the operator of seven UK airports including Heathrow, Gatwick and Stansted, said that traffic increased by 1.9 per cent in January compared to the same month last year. North Atlantic traffic was down 3.4 per cent although long haul, excluding North America, was up 6.8 per cent.
'It remains a mixed picture for the overall tourism business in the UK but clearly costs are going to prove a decisive issue in the months ahead. The hotel industry can still go into profit decline even though sales are rising,' said TRI's Bailey.
For more information contact David Bailey on 020 7486 5191 or email david.bailey@trihc.com.
Logos, product and company names mentioned are the property of their respective owners.
