Business boost for hotels in November, Glasgow steals the show

According to business advisory firm BDO, rising demand from a resurgent corporate sector helped year-on-year rooms yield grow by 6.5 per cent to £116.01 in London, and by 8.3 per cent to £44.52 in the regions.

But separate figures released today by tourism market research specialists LJ Research reveal that it was Glasgow that lead the pack, with hotels in the city reporting there highest occupancy levels since monthly record-keeping began in 1999.

It may not boast a famous castle or a major Parliamentary building like its more easterly-situated sister and international tourist hotspot Edinburgh,​​ but on 12 separate nights during November, hotel occupancy in Glasgow reached 90 per cent or above, peaking at 98 per cent on Saturday, 23 November. Occupancy rates averaged at 83.3 per cent for the month.

The LJ Forecaster report, which collected data from 23 hotels in the city centre, also discovered that Glasgow’s year-to-date average (April to November) is running at 84.1 per cent – a 2.4 per cent rise from last year.

Hospitable city​

These high occupancy rates were at the expense of average room rates, however, which fell by 11.7 per cent compared with November 2012. According to LJ Research, this decline can be attributed to the city attracting fewer business visitors last month.

“Another record month for Glasgow’s hotels suggests solid growth is underway in the city’s tourism industry​​,” said Sean Morgan, research director at LJ Research. “At 83.3 per cent, November was the sixth consecutive month with occupancy rates higher than 80 per cent.

“The year-on-year decline in room rates demonstrates the value of business tourism to Glasgow, specifically hosting the International Conference on Drug Therapy in HIV. However, recent figures also highlight that the city is extremely good at flexibly targeting leisure visitors when a reduction in business visitors is anticipated.”

Nascent recovery​

Looking at the rest of the UK, the rooms yield growth in London was driven by a 5 per cent increase in room rate from £131.63 to £138.20, and a 1.4 per cent improvement in occupancy to 84 per cent compared with 82.7 per cent a year ago.

In the regions, the rooms yield surge was the result of a 3.7 per cent rise in room rate from £59.24 to £61.41, coupled with a 4.5 per cent improvement in occupancy from 69.4 per cent to 72.5 per cent.

Robert Barnard, partner at BDO, believes ‘the hotel sector’s strong run continues to gather momentum’.  “The data show that operators are successfully boosting occupancy without having to resort to discounting, which suggests that underlying demand is heading in the right direction,” he said. “However, this demand is currently lop-sided.

“Hotels tend to rely on corporate occupiers during the autumn, and much of the recent recovery in operator performance has been driven by increasing business confidence and spending.  The meetings, incentives, conferences and exhibitions market appears to be rebounding after a number of years in the doldrums.

“Consumers, by contrast, are struggling with negative real wage growth and are playing a less prominent role in the sector’s recent upturn. Persuading cash strapped consumers to stay in hotels remains a challenge.”