London Hotels Record Third Successive Year of Profit Growth Thanks to Olympics

Whilst the data suggests that London hoteliers would have just about managed a year-on-year profit increase without it, it was the Olympic-led 90% increase in profit in August which contributed to yet another significant increase in profit growth in the capital in 2012, according to the latest HotStats survey of approximately 560 full-service hotels across the UK by TRI Hospitality Consulting.

Although 2012 will go down in history as a remarkable year of events, which will undoubtedly go unmatched within a generation, London’s hotel performance remained unpredictable throughout, as uncertainty remained about the impact of these events on headline performance. 

The year started well enough with a strong performance across all measures in the first five months, but doubt started to creep in as the events got underway. 

Overall, hoteliers in London recorded three months of year-on-year profit decline in 2012, in June (-9.3%), due to the celebrations associated with the Diamond Jubilee, during July (-3.1%) due to pre-Olympic jitters and November (-5.6%) as the post-Olympic hangover began to set in.

But it was the outstanding increase in headline performance levels during the Olympics in August, which has cancelled out these declines and enabled a 4.9% increase in profit per room in 2012 to £75.27 from £71.73 during the same period in 2011. 

“Despite the last few years being one of the toughest trading periods in recent history, hotels in London have recorded yet another year of profit growth on the back of increases in 2010 (+13.9%) and 2011 (+4.7%). For London hoteliers it has been a breathless charge through 2012 and it now seems like a lifetime ago that the industry was discussing how bad the Olympic Games may be for business. How different our perspective is now, as, taking nothing away from the ability of London’s hotel managers, the Olympics are the saviour of the year and we will take only positive memories away from 2012,” said Jonathan Langston, managing director of TRI Hospitality Consulting. 

In December, London hotels returned to profit growth (+1.6%), but it was not as convincing as during other months. As the city suffered a 0.8% drop in RevPAR (Revenue per Available Room) due to a 2.2% decline in achieved average room rate, growth in TrevPAR (Total Revenue per Available Room) was only possible due to increases in ancillary revenues, including food and beverage per available room (+5.4%).

Click here ( Adobe Acrobat PDF file) to view statistics.

For more information contact:

Jonathan Langston, managing director 020 7892 2201

jonathan.langston@trihc.com

David Bailey, deputy managing director 020 7892 2202

david.bailey@trihc.com

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