In addition to the decline in room revenue, hotels in the capital endured unfamiliar blows across all ancillary departments, including a 7.9 per cent drop in food and beverage income and a 4.6 per cent decline in meeting room hire revenue.
This is according to the latest HotStats survey of approximately 550 full-service hotels across the UK by TRI Hospitality Consulting.
“Although a decline in profit levels for the city could not be ruled out following the 16 per cent year-on-year increase in profit per room in October 2010, it goes against the robust performance in the city last month when Gross Operating Profit per Room (GOPPAR) grew by 10.4 per cent,” said Jonathan Langston, managing director of TRI Hospitality Consulting.
While TrevPAR levels for the month remain approximately 10 per cent above the year-to-date average at £145.77, illustrating the strength that remains in the London hotel market, total revenue levels in the capital dropped by 2.2 per cent during October to £159.46.
The provinces
Meanwhile, profitability levels in the Provintial hotel market declined by 7.9 per cent for October. Provincial hoteliers suffered declines in food and beverage (-4.1 per cent), leisure (-2.1 per cent) and meeting room hire (-7.3 per cent) revenue per available room. The impact of the decline in ancillary departments resulted in a 1.9% drop in TrevPAR of to £94.84 from £96.65 in 2010.
Langston added: “While Provincial hoteliers have made a brave comeback in 2011 with growth in all revenue measures, they are at serious risk of suffering a fourth consecutive year of profitability decline having achieved only two months of growth in profit per room during 2011.
“And with the Bank of England reporting a risk of stagnation until the middle of 2012, Provincial hoteliers will continue to face challenging trading conditions.”
Echoing the results of the recent HotStats confidence Monitor for Q4 2011, the survey revealed an increasing proportion of third-party bookings as year-on-year commission levels per available room increased by 16.7 per cent.