The New Year is likely to be a challenging one for for UK hotel operators due to flat occupancy levels and increasing overheads, despite positive global and EU economic growth.
Hospitality data group HVS warned that the combination of wages going up, staff shortages, increasing food and utility costs, and the impact of higher property taxes and business rates as well as a strong pipeline of new hotels will put pressure on UK hotels’ operating margins over the next 12 months.
Despite little or no occupancy growth, yields are predicted to increase slightly with average daily rates (ADR) and revenue per available room (RevPAR) rising by an anticipated 5% in London and 3% in the regions.
European hotels are likely to see RevPAR increases, with establishments in Paris and Brussels continuing to recover from the impact of recent terrorism atrocities.
Hoteliers will have to focus on service and quality to outperform their competitors and encourage direct bookings instead of using costly online travel agents.
Russel Kett, chairman of HVS London, said: “Next year will truly sift the good from the average, particularly in cities with an increasing supply of hotels, such as London. Operators need to maximise revenue from every bit of space and keep a tight control on overheads. The message to tourists must be that the UK is still very much open for business.”