UK hotel sector set for sharp recovery

17 August 2004
UK hotel sector set for sharp recovery

Britain's hotel industry is set to bounce back to pre-2001 levels by the end of next year, according to the latest forecast from TRI Hospitality Consulting.

Revenue per available room (revpar) is expected to reach £54.23 in 2005, compared with £52.01 in 2000, across TRI's sample of chain hotels.

The predicted growth comes after three years of consecutive falls in revpar during 2001, 2002 and 2003.

The turnaround will be sharpest in London, where revpar is set to grow by 13% this year, followed by 9% in 2005 and 7% in 2006.

Jonathan Langston, managing director of TRI, said: "Although London was hit hardest in the most recent downturn, the rate of bounce-back we are predicting is remarkable, particularly given our low-inflation environment."

Outside London, the recovery will be steadier, says TRI, reflecting the fact that the provincial market was less affected by the downturn as it is more reliant on guests from within the UK.

Revpar in the regions is forecast to increase by 5% this year, with similar increases in 2005 and 2006.

The boom in leisure guests seen in the regions over the last couple of years is set to wane as buoyant consumer spending is reigned in by higher interest rates. But the level of business from commericial guests is expected to increase.

The recovery in revpar across the country will be mainly driven by increases in room rates.

But in London occupancy will also be a key factor, with the level set to top 80% this year for the first time since 2000.

TRI says 80% is the "trigger point" for London hotels - above this level of occupancy they can begin to move away from discounting their rooms and start to seek out more profitable sources of business.

The trigger point for the provinces is typically about 72%.

Total UK hotels - forecast of annual rooms performance:


Provincial hotels - forecast of annual rooms performance:


London hotels - forecast of annual rooms performance:


Source: TRI Hospitality Consulting

Buy this week's Caterer magazine for more industry news and analysis

The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking