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Occupancy in London hotels outgrew regional hotels during Q4, increasing by 5% compared with a 1% increase in hotels outside the capital – as supply outgrew demand according to hospitality consultants HVS.
Its ‘UK Hotel Market Tracker Q4’ found average room rates increased by 5% in London’s hotels to £157.20 during the period, with RevPAR also increasing by 10%. RevPAR growth was 3% for the full year.
However, HVS also found that regional hotels failed to see any growth in average room rates, causing RevPAR to “plateau”. HVS chairman Russell Kett labelled the “trading picture” of London compared with those outside of the capital as “very different”.
He said: “Hotel supply outside London grew 1.8% in Q4 of last year, causing supply to exceed demand. As a result of more intense competition, operators were unable to lift average room rates.
“While supply growth was also strong in London at 2%, in 2018 demand resulting from a number of high profile events boosted visitor numbers and meant that in Q4 London’s operators were able to mitigate the impact of the increasing number of hotels rooms available.”
According to the Tracker, supply is expected to grow further in 2019 both in London and the regions, with a 4% rise in inventory in the capital and a 3.3% supply growth outside London.
Kett added: “This increase in supply to the UK market means that hotel operators will have to work harder to boost their ADR unless demand for rooms grows significantly. This, as well as rising costs and the impact of Brexit, means that 2019 will be another tough year for hotel operators.”
