Heathrow hotels see profits drop as passenger numbers slow

10-Oct-2016 - Last updated on 21-Aug-2024 at 19:32 GMT

Hotels around Heathrow saw a fall in profits as passenger numbers slowed, according to figures from HotStats

Profits fell more than 11 per cent at hotels at Heathrow in August as passenger numbers through the airport slowed.

While the UK's hospitality sector in general benefited from an uplift in trade from bargain-hunting tourists post-Brexit, hotels close to the nation's busiest airport missed out as more Brits decided to holiday-at-home.

Although hotels at Heathrow monitored by HotStats achieved an increase of 2.8 per cent in average room rate (ARR)to £68.59 it was not enough to offset the 5.8 per cent drop in occupancy during August. As demand from leisure and corporate guests declined, so to did revPAR, falling 3.9 per cent to £57.32 for August.

While year-to-date passenger numbers at Heathrow are marginally (0.7 per cent) ahead of 2015's, HotStats said hotels in proximity to the airport were not feeling the benefit with revPAR falling 2.5 per cent to £60.34 in the eight months to August.

Brexit boost

August was good news for many regions, however with the North West and Yorkshire singled out for achieving profit growth post-Brexit.

HotStats said a 5.5 per cent increase in ARR at hotels in the North West helped fuel a year-on-year profit increase of 3.5 per cent.

"August is typically one of the most operationally challenging months of the year due to a marked step down in commercial demand, but hotels in the North West were once again able to leverage price due to strong volume, as they have done for the majority of this year," it said.

Hotels in York also bounced back from the impact of the floods in January with a 15.5 per cent increase in RevPAR in August, leading to an 8.1 per cent profit increase.

"As one of the UK’s most popular tourist destinations, August is always a key month for the city’s hoteliers and this year proved to be a strong period of operation, with hotels achieving a 4.2 percentage point increase in occupancy, in addition to a 10 per cent increase in achieved average room rate," said HotStats.