September, 2003 Indicates Rise in RevPAR
|22 October 2003 - Since March 2001, the story
has remained the same – revenue per available room (revPAR) for London
hoteliers has consistently been in decline. That was until September this
year, when preliminary results from the HotelBenchmark Survey by Deloitte
showed that for the first time in 18 months (ignoring the impact of 9/11),
hotels in Central London reported a rise in revPAR.
Average room rates have been a key pressure point, however September was able to show an increase of 1.8 percent to tip the £100 mark. Occupancies continued to strengthen, up 4.8 percent to 84.1 percent, resulting in a 6.7 percent rise in revPAR compared to September 2002.
Whilst year-to-date London still exhibits a position to which we have grown accustomed, there are nevertheless signs that the industry could be starting to emerge from the barrage of events that have blighted performance of the last couple of years. In the nine months to September 2003, occupancy rates are down only 2.1 percent, while average rates are down 5.2 percent, leading to a year-on-year revPAR decline of 7.2 percent.
Given London’s exposure to international travel, recent figures from ‘Visit London’ forecast that 2003 room nights from the domestic market will be down 7.6 percent against a decline of only 2.2 percent from the overseas market. The spend by domestic and overseas visitors will be down 6.8 percent and 1.0 percent respectively. Given that the overseas market comprises a much larger proportion of room nights sold the year-on-year decline in nights and expenditure is mitigated to just 4 percent and 2.6 percent respectively – adding some weight to the view that a gradual recovery in the industry’s fortunes may be in progress.
Deloitte & Touche LLP is the UK's fastest growing major professional services firm based in 21 UK locations, with over 10,000 staff nationwide and fee income of £1,228 million in 2002/2003. It is a member firm of Deloitte Touche Tohmatsu, a leading professional services organisation, delivering world class audit, tax, consulting and corporate finance services, with around 120,000 people in over 140 countries. Deloitte Touche Tohmatsu is a Swiss Verein, and each of its national practices is a separate and independent legal entity.
Deloitte & Touche LLP
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|Also See:||March 2003 - London Hotels Record Double Digit Declines in RevPAR; Occupancy Falls 8.6% Compared to Previous Year / April 2003|