UK Hotels off to a Bad Start in 2018

Date: March 2018

What: Latest Hotstats Report

What Did They Say: Hotels in the UK experienced a rough start to 2018, with escalating costs leading to a 3.9 per cent year-on-year decline in profit per room.

According to the latest poll of full-service properties by Hotstats, RevPAR growth came in at a disappointing 0.6 per cent to £66.28 owing to a 0.8 per cent increase in achieved average room rate to £102.58. This offset a 0.2 percentage point drop in room occupancy to 64.6 per cent.

Despite growth in non-room revenue (including a 6 per cent increase in conference and banqueting), hotels struggled to turn a profit, facing a 6.8 per cent increase in rooms expenses and a 3.1 per cent growth in payroll costs.

As a result GopPAR fell to £26.10 in January.

Pablo Alonso, CEO of Hotstats, commented: “January was the sixth consecutive month in which hotels in the UK have recorded a year-on-year decline in room occupancy. I’m not sure it’s time to start panicking yet as the drop has been fairly minor. However, with a record number of additions to supply anticipated in London and the regions in 2018, margins really need to be monitored.

“Moreover, escalating payroll costs should be a key concern for hotel owners, operators and investors, with further increases in the National Living Wage set for April 2018 and net migration levels falling to their lowest level since records began, stifling a major source of labour in the hospitality industry.”

THPT Comment: Hotstats and others quite rightly tell us that occupancy and RevPAR have been very healthy for past ten years in London/UK but costs are out of line…agree important issue and maybe Artificial Intelligence will assist and Brexit probably won’t….I am just astonished that London has dealt with the huge additional supply of rooms, especially at the top-end, in terms of filling them at quite tasty room rates…i guess sweat the non-rooms revenue points.

First Seen: Hotstats Monthly Report