London occupancy dives as Birmingham prospers

Hotel occupancy in London has declined for its sixth consecutive year-on-year quarter, according to the latest Hotel Bulletin: Q2 2016, published this week by HVS, AlixPartners and AM:PM.

Occupancy in the capital, in common with other major European cities, continues to be affected by increased global terrorist activity and, in London’s case, the uncertainty surrounding Brexit.

The number of US tourists visiting London is also down, mainly owing to the presidential election.

The impact has seen a 2% decline in London’s revenue per available room (RevPAR) compared with Q2 2015 and average room rates failing to increase for the second consecutive quarter.

“Whilst this is significant in the short term, London is, and will remain, a huge magnet for inbound tourism so the longer term future of the capital’s hotel sector is still positive, even when taking into account the new hotels in the pipeline and the potential impact of the Brexit implementation causing economic wobbles,” commented HVS chairman Russell Kett.

Addressing the Brexit decision, Kett concluded that the double-impact of weaker sterling and a reduction in anticipated economic growth was both ‘good and bad news’. “Britain has become a cheaper destination for overseas visitors, dampening outgoing UK travel but potentially increasing the F&B costs as some suppliers pass on price rises,” he concluded.

Across the UK the picture was more varied, although with overall demand sluggish, average RevPAR growth reached only 2%.

In stark contrast to London, however, Birmingham’s hotels posted average occupancy rates of 75% between March and May 2016, up from 71% in 2014 and 74% in 2015 and are the best results posted for spring since records began in 2003.

Events contributing to the seasonal growth in Birmingham’s accommodation sector included the All England Badminton Championships at the Barclaycard Arena and Crufts at the National Exhibition Centre (NEC) in March.

Performance of hotels across the 12 UK cities reviewed varied significantly in Q2. Birmingham was top with RevPAR growth of 16%, while hotels in the Roman city of Bath saw RevPAR up 11% year-on-year on the back of a boost in international tourists.

Emma Gray, director of marketing & communications at Meet Birmingham, the city’s official business tourism programme, said in a separate press release: “While a host of new brands have recently chosen to launch in Birmingham, there are a further 14 hotels – amounting to more than 2,000 bedrooms – in the pipeline, demonstrating the confidence that investors currently hold in Birmingham’s visitor economy and tourism offer.”

In contrast Newcastle recorded another quarter of RevPAR decline of down 4%, while Aberdeen saw RevPAR decline 24%.

Paul Colston

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Paul Colston

Managing Editor, Conference News & Conference & Meetings World.

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