New hotel supply to cut occupancy in London, PwC forecasts

The latest PwC 2013 UK hotel forecast is predicting a challenging year ahead for hoteliers, with new supply in London expected to shave two percentage points off occupancy in 2013.

In the regions, the forecast says weaker economic prospects are likely to make the going even tougher.

PwC’s latest survey is forecasting an overall two per cent decline in UK RevPAR (revenue per available room), taking it to just under £60.

Occupancy is expected to edge down 0.7 per cent to average around 72 per cent, while average daily rate (ADR) could fall by 1.2 per cent to just under £82.  

The survey averages conceal London’s star qualities and a more lacklustre performance across diverse regional locations. 

Robert Milburn, Hospitality and Leisure leader at PwC, said: “This updated UK hotel forecast reflects our latest thinking on hotel performance in 2013, with the forecast impacted by weaker UK economic prospects but also supported by a weaker pound. While we still anticipate overall trading declines in 2013, these falls are less sharp for London but more unfavourable for the regions than we expected in November 2012.” 

In London, ADR will decline by 1.2 per cent in 2013 but, with rates averaging almost £137, this remains high by any city standard. Occupancy is expected to fall by two percentage points to 79 per cent, making a third year of decline. This partly reflects the steep 6.5 per cent (7,700 rooms) increase in hotel rooms in the capital in 2012 with a further 4,600 rooms set to open this year.

Liz Hall, Head of Hospitality and Leisure Research at PwC, said: “For travellers, a more affordable London is good news and will help the city capitalise on the positive media spotlight that shone in 2012. For hoteliers, RevPAR is expected to end the year at £108, 3.2 per cent below 2012 levels but still 18 per cent higher than 2009.

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Paul Colston


Paul Colston

Managing Editor, Conference News & Conference & Meetings World.

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