Hotels in London achieved a fifth consecutive month of strong profit growth in May as rehearsals for London’s summer of celebration got under way, according to the latest HotStats survey of approximately 560 full-service hotels across the UK by TRI Hospitality Consulting.
With the beginning of the London Olympics now being measured in days rather than months, the statistics for May suggest that leisure visitors to the city are fuelling a consistent year-on-year increase in headline performance levels, which included a 2.6% increase in Gross Operating Profit per Available Room (GOPPAR) to £79.86.
In May, room occupancy increased by 1.5 percentage points to a staggering 84.1%, with the growth in volume primarily attributed to the leisure sector, which increased by 3.1 percentage points to 21% of total demand.
Demand in the city was boosted by Olympic test events throughout the month of May, many of which have taken place at the Olympic Park in Stratford, including the Water Polo International, Invitational Hockey Tournament, Disability Athletics Challenge and Synchronised Swimming Qualification.
Despite increases in achieved rate in the corporate (+2.5%) and conference (+5.2%) segments, the city’s hoteliers have witnessed a cumulative four percentage point decline in the proportion of demand attributed to these sectors as business visitors have unsurprisingly become more wary about visiting the capital as the Olympics threatens to negatively impact business activity.
“Whilst we have yet to see much sun, we are well into the summer of celebration, which London hoteliers have been hoping will drive the demand for hotel accommodation and allow for increases in headline performance levels. So far in 2012, performance records have been consistently smashed, but in the coming months the hotel industry will provide a real barometer of the benefit these events will have on businesses in the capital and beyond,” said Jonathan Langston, managing director at TRI Hospitality Consulting.
In addition to the increase in rooms revenue, the London hotel market recorded strong increases in ancillary departments including food and beverage (+4.0%) and meeting room revenue hire (+2.9%) per available room; which contributed to a 3.9% increase in Total Revenue per Available Room (TrevPAR) to £161.28.
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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
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