May 2003: UK hotel performance continues to struggle

Jul 12, 03 | 4:26 am

Tweet May 2003 results from the UK edition of the HotelBenchmark Survey by Deloitte & Touche revealed a fifth successive month of revPAR (revenue per available room) declines for the UK hotel industry during 2003. This performance mirrors the longer-term trend for the UK hotel industry, whichin the last two years has only reported five months of positive revPARgrowth. During May revPAR fell by 7.7 percent compared to the prior year, driven predominantly by a 5.7 percent decline in average room rates.

Although regional UK hotels (i.e. excluding London) also experienced a dipin revPAR, this was limited to only 2.1 percent.
Of the 13 regions tracked across the UK only five managed to improve their performance compared to May 2002 - Cheshire, Greater Manchester, Hampshire, Lancashire and hotels along the M2/M20 corridor. This trend was reflected across UK cities, with only eight of the 20 cities tracked experiencing anygrowth. York, Manchester and Sheffield were amongst the top three performers, reporting an increase in revPAR of 7.1, 6.9 and 4.5 percent respectively. Conversely, the greatest declines were experienced in  Brighton, Swindon and Heathrow, where revPAR fell by 13.5, 11.3 percent and 9.4 percent respectively.

Year-to-date performance shows an overall decline in revPAR across the UK hotel market of 6.8 percent to £45, with regional hotel performance falling by just 3.1 percent to £39. Whilst the majority of markets are still experiencing revPAR declines, the only ones to have slipped into double-digit territory are UK hotels with an annual average room rate over £75, Berkshire, West Midlands, London and Brighton.

Only 12 of the 47 markets tracked on the survey have managed to improve their performance so far in 2003, with Lancashire, Cardiff, Belfast, Wales and Manchester amongst the top five strongest performers. Hoteliers in the northwest markets of Lancashire and Manchester have experienced an increase of revPAR of 9.2 and 4.3 percent respectively, stemming in part from increased demand from the commercial sector. During 2002 gross domestic product (GDP) of the northwest was nearly 9 percent, compared to just 1.6 percent for the UK.

Note: all analysis is in UK £.

The UK edition of the HotelBenchmark Survey collects occupancy and average room rate data from over 1,350 hotels representing nearly 145,000 rooms every month, making it the largest independently run survey on UK hotel performance. For further information or details on how to join the survey please contact Rob Gray -  mailto:rgray@deloitte.co.uk .

Preliminary data is normally available via  www.HotelBenchmark.com   15 days after month end. If you would like online access to this information please request a username and password using the online form, which can be found at www.HotelBenchmark.com/HIBS/benchmark_joinsurvey_form.asp .