According to the latest data from STR Global, hotels in London ended last year with double digit growth in revenue per available room (revPAR).
Commenting on the figures, Marvin Rust, hospitality managing partner at business advisory firm Deloitte, said: “Hotels in the capital have been performing particularly well in the final two quarters of the year; the daily results up to and including 31 December reported revPAR increases of 11.9 per cent to £112.
“Average room rates have been the key driver of growth this year, with £12 being added compared to 2009 and now stand at £136.”
The London hotel scene also saw a spike in investment activity in 2010, which – seen against a backdrop of significant restructuring across the overall UK hotel industry – is another signal of the capital’s resilience, indicates Deloitte’s global head of advisory – tourism, hospitality & leisure, Nick van Marken.
“This really underpins the city’s inherent attraction to global investors, and demonstrates that even in difficult times, prime hotel property remains in demand,” he said.
2011 outlook
STR forecasts a 2.2 per cent rise in revPAR for London next year, while Regional UK is expected to report stronger growth than the capital, up 4.4 per cent.
However, Deloitte said it was “more optimistic on London” and expects the capital’s revPAR to post a healthier growth than these predictions. Business will likely be boosted by more visits from US travellers taking advantage of a weaker pound against the dollar in the year of the Royal wedding, said the firm.
Nevertheless, it added that not even London will escape challenges going forward, with the VAT increase and a low GDP rise of just 1.3 per cent.
“With future demand for hotel rooms in both London and the Regions beginning to weaken, caution may well be the buzz word for next year,” said Rust.
“It is interesting to note however that the econometric models predict a strong start to 2011 before a slowdown in the second half of the year.”