High occupancy fuels revpar growth in London hotels

Average room rates in London hotels exceeded £90 in September for the first time since the terrorist attacks of 2001, according to the latest figures from Tri Hospitality Consulting.

The 6.7% rise in room rates to £91.19 fuelled a 7.7% increase in revenue per available room (revpar) to £78.22.

London hoteliers have been able to push up average room rates because they are now running close to full capacity. However, occupancy grew more slowly in September, by 0.8 percentage points to 85.8%.

A similar pattern emerged in the provinces. Revpar grew by 5.3% to £51.40 on the back of a 4.4% rise in room rate to £66.87 and a small increase in occupancy, which advanced by 0.7 percentage points to 76.9%.

Over the first nine months of the year, revpar surged ahead by 14.8% to £69.54 among London hotels. This growth stemmed from a 7.8% rise in room rate to £86.59 and occupancy levels that were 4.9 percentage points ahead of last year at 80.3%.

"A sharper rise in profitability can now be expected because increases in rate drive profits faster than increases in occupancy," said Tri managing director Jonathan Langston.

by Angela Frewin

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