London Hotel Market Booms

Posted by Nick Niesen on October 29th, 2010

Whilst top end London hotels have had a fantastic year in London the same is not the case in the midmarket with the worse performance coming from the 3 star sector.

The best performance has come from the capital?s five-star hotels, which hardly missed a beat after the terror attacks in contrast with the harder hit three and four star sectors.

A surge in visitor numbers to the capital enabled five-star hotels to boost average room rate by 8.45% to £221.75, double the growth of 4.18% recorded in the same period of 2005. Occupancy rose 6.6 percentage points to 77.04%, compared with 3.97 percentage points in 2005. As a result, revenue per available room leapt 15.66% to £170.83 at five-star hotels, compared with 8.32% last year.

Four-star hotels in the capital also progressed. Room rate grew 4.76% to £98.51, and occupancy increased 5.91 percentage points to 81.61%. This lead to a double digit revpar gain of 10.95% to £80.40.

But the price-sensitive three-star market found it difficult to raise room rates, which grew by just 44p to £71.87. Occupancy grew 5.3 percentage points to 81.04% and revpar was up 5.96% at £58.25.

It is expected that there will be unprecedented growth in the second half of this year after the market was artificially depressed by last July?s London bombings adversely effecting the 2005 figures.

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Nick Niesen

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Nick Niesen
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