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London’s performance in Q1 2011 fell someway short of expectation (partly weatherrelated) but a bumper Q2 and a good Q3 have put it back on track for full year RevPAR growth of just over 8%, mainly driven by rate increases. In the provinces though things remain much tougher and while occupancies have nudged forward slightly year on year, rates have remained stubbornly flat as hoteliers have failed to recover pricing power post the technical recession. This problem with provincial rates is now getting very serious, with ADR languishing well below the levels attained in 2005 to 2008.
For 2012 everything is riding on the Olympics, but outside Q3 (which also benefits from Farnborough) we continue to expect an unremarkable year with the risk of falling RevPAR in Q2 and Q4 in London as the capital feels the impact of the new supply coming n to the market. The provinces should make some progress but getting rates up will remain a challenge for most.
Pwc-london Hotels Forecast 2011-12
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
