A year after successfully hosting the Olympics, hotels in London experienced, unsurprisingly, a total revenue and profit decline in July of -6.7% and -14.6% respectively compared to the same month last year, according to the latest HotStats survey of 624 full-service hotels across the UK.
In fact, the capital showed negative year-on-year results across most key performance indicators with occupancy being the only exception. Hoteliers saw a notable increase of 7.1 percentage points to 87.9% compared to July in 2012 and 6.2 percentage points above the rolling 12 months.
This increase in occupancy was at the expense of the average room rate (ARR) which decreased by 12.9% resulting in revenue per available room (RevPAR) dropping by 5.2% to £130.59 compared to £137.78 last year. The market segmentation shifted compared to July 2012 with a fall in the residential conference (-6.4%) and corporate (-3.4%) segments and an increase in leisure (+6.2%) and tours/groups (+4.2%).
Food & beverage departments were the only two revenues to surge with a 2.6% rise in food and a significant growth in beverage (+11.4%) this month. Not surprisingly, the decline in residential conference demand caused a decrease in meeting room rental, which fell by 46.7%. Total revenue per available room (TrevPAR) therefore decreased by -6.7% compared to the same month last year. A decline in departmental revenue conversion (-10.7%) and a one percentage point increase in payroll led London hoteliers to a -14.6% fall in gross operating profit per available room (GOPPAR) and impacted the calendar year profit performance by -2.1%.
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