Profit down by 17% at London hotels

25th March 2009, 10:14am

The profitability of London chain hotels fell by 16.9% in February, according to the latest Hotstats survey by TRI Hospitality Consulting.

Total revenue and room revenue were down by 11.3 and 10.4% respectively in London. Average room rate dropped by 6.6% to £108.15 and occupancy was down 3.2 percentage points to 74.7%.

Jonathan Langston, managing director, TRI Hospitality Consulting, commented on the results: "Targeted discounts stimulated leisure demand, which, all things considered, kept occupancy levels reasonably high. But this was not enough to compensate for the continuing loss of high-paying corporate guests, which combined with discounted rates, meant no interruption to the negative trend."

The severe winter weather at the start of the month caused a mixed outcome for the London hotel market. Some hotels were filled with stranded travellers for one or two nights, while other hotels suffered from cancellations or the postponement of functions.

In the provinces, profitability fell by a quarter to £22.23 and total revenue fell by 11.1% to £87.06 on a per available room basis. The fall in sales contributed to a year-on-year increase in payroll costs from 33.2 to 34.4% of total revenue.

Average occupancy was down by 4.6 percentage points to 64.5% and average room rate dropped by 6.2% to £69.39 resulting in a room RevPAR fall of 12.5% to £44.75.

"Perhaps the only comfort to take away from these latest numbers is that the accelerating downward trend in provincial RevPAR performance did not continue this February," said Langston.

Related Articles:

• 26 Nov 2009 - The London hotel market records second highest occupancy performance in 2009
• 11 Nov 2009 - Confidence amongst UK hotel general managers at a high
• 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
• 30 Mar 2009 - Mixed performance across key city hotel markets
• 03 Mar 2009 - Hotel's revenue and profit continues to fall
• 25 Feb 2009 - Hotel profits fall by almost one third
• 23 Feb 2009 - TRI Hospitality Consulting wins hotel report award
• 09 Feb 2009 - UK hotels face most challenging conditions in 17 years
• 28 Jan 2009 - 64% of hotel managers concerned for 2009
• 28 Jan 2009 - Flat profit at London hotels
• 15 Dec 2008 - TRI nominated for 2009 Hotel Report Awards
• 28 Nov 2008 - A snippet of facts found this week
• 27 Nov 2008 - UK hotel profits fall by 9%
• 24 Oct 2008 - London hotels hit by credit crisis
• 10 Jun 2008 - UK hotels continue to rise in room rates
• 04 Mar 2008 - London hotels achieve profit increase
• 27 Feb 2008 - TRI wins Advisor of the Year title

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