UK hotel profits fall by 9%

27th November 2008, 12:38pm

The UK chain hotel market has reported a 9% drop in profit last month, according to the latest HotStats survey from TRI Hospitality Consulting.

The sample of 509 UK branded hotels reported a 3.2 percentage point drop in average occupancy to 77.4%.

Jonathan Langston, managing director, TRI Hospitality Consulting, said: "For most UK hoteliers the effects of the economic downturn were clearly felt in October. With fewer guests and higher operational costs, pressure on profitability was inevitable."

In the Provinces, average profit as a percentage of total revenue in October fell year-on-year from 37.6 to 35.1%. An increase in the national minimum wage which came into force on 1 October may have contributed to the rise in costs.

Meanwhile average room rate dropped by 1.9% to £73.72 which, combined with lower volume, led to an 11.2% fall in daily IBFC to £36.88 per available room.

Some city markets bucked the trend, however, increasing both average room rate and profit thanks to local events. Liverpool's European Capital of Culture status made it a popular leisure destination during the half-term break, and a series of major football fixtures kept demand high.

Average occupancy rose by 1.9 percentage points to 81% In Newcastle, the Great North Run helped daily IBFC increase by 6% to £44.32 per available room.

Related Articles:

• 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

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