Hotel profits fall by almost one third

25th February 2009, 9:59am

The profitability of UK chain hotels slumped by 28.8% in January, according to a latest survey conducted by TRI Hospitality Consulting.

Total revenue and room revenue were down by 11 and 12.9% respectively in the provinces.

Meanwhile average room rate dropped by 6.3% to £68.57 and occupancy was down 4.1 percentage points to 54.6%.

David Bailey, deputy managing director at TRI, commented on the findings: "Unfortunately the latest figures highlight a deepening downward trend from the latter end of 2008 onwards. The year-on-year falls in provincial RevPAR have accelerated from 3.9% in September to 12.9%  this January."

Profit did not fall as far in London as in the provinces thanks to higher absolute room rates.  Average occupancy for the month was down from 71.8 to 67.5% and average room rate fell 7.7% to £102.84.

Bailey continued: "An accelerating negative trend has now resumed in London after some respite during the Christmas holidays from Europeans taking advantage of the weak pound."  London RevPAR fell by 4.9% in October 2008; -11% in November; -6.2% in December and -13.3% this January.

The majority of hoteliers made staff cuts during the last quarter of 2008, according to the TRI quarterly Confidence Monitor, published last month.

Related Articles:

• 02 Nov 2009 - London hoteliers lead the way
• 30 Oct 2009 - The latest issue of London Hotel Development Monitor now available
• 28 Oct 2009 - London hoteliers boost profits
• 01 Oct 2009 - European hotels experience a weak August
• 28 Sep 2009 - Holiday makers boost occupancy levels for UK hotels
• 26 Aug 2009 - London Hotel occupancy exceeds 2008 levels
• 18 Aug 2009 - UK hotel general managers remain positive
• 28 Jul 2009 - Occupancy levels hold up at London hotels
• 25 Jun 2009 - Recession has less impact on UK hotels
• 22 May 2009 - London occupancy stays above 80%
• 28 Apr 2009 - Lower hotel room rates keep occupancy high
• 27 Apr 2009 - UK hotel managers are more optimistic
• 24 Apr 2009 - UK hotels experience heavy falls in profit
• 30 Mar 2009 - Mixed performance across key city hotel markets
• 25 Mar 2009 - Profit down by 17% at London hotels
• 03 Mar 2009 - Hotel's revenue and profit continues to fall

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