PwC predicts further hotel growth in 2015

PwC’s latest forecast expects occupancy rates and average daily rates (ADR) to rise both in London and throughout the rest of the UK in 2015 as they have done this year, despite some summer ‘turbulence’.

For London, PwC predicts a 1.5 per cent rise in average hotel occupancy to 84 per cent and a 3.6 per cent rise in ADR to rates of over £145. In the regions, it predicts a 1.6 per cent rise in occupancy to 76 per cent, and a 4.3 per cent rise in ADR taking average room rates to just under £65.

Head of hospitality and leisure research at PwC and author of the PwC UK hotels forecast 2015 Liz Hall said: “We expect further growth in 2015 from demand to attend Rugby World Cup matches. The event will be held across the country in Birmingham, Brighton, Exeter, Cardiff, Gloucester, Milton Keynes, Leicester, Leeds, Newcastle and Manchester as well as London. With a third of matches set to be played on a Sunday, traditionally a low occupancy night, the event is a great opportunity for hotels. ”

Meeting demands​

At the end of June there were nearly 23,000 new hotel rooms in the pipeline to be developed for opening in 2015 and the remainder of 2014. More than 10,000 of the rooms were to be located in London.

Hall said:  “Overall, the general feeling is that supply is not currently an issue. However, in some areas more new hotels may exacerbate any demand weakness. We would expect the development pace to accelerate more steeply as economic growth takes hold and access to financing improves.”

New business models​

Despite its positive prediction for hotels next year, PwC states that hoteliers should be aware of other business models aside from traditional hotels that could attract customers, such as AirBnB.

Hospitality and leisure leader at PwC David Trunkfield said: “New products and business models could represent a challenge for existing hotels. An example is the potential impact of so called sharing economy models such as Airbnb.

“Sharing economy platforms provide new entrants and individuals the opportunity to present travellers with non-hotel alternatives in large scale under a trusted brand, and travellers are taking them up on the offer. Sharing platforms such as AirBnB are growing rapidly, and are expected to continue to do so. Some of this growth could come at the expense of hotels, hoteliers need to look at what steps can be taken to ensure the impact on the hotel industry is minimised.”