Double digit growth for hotels in Q4 2014
The UK’s hotels saw average revenue per available room (RevPAR) grow by double digits in the last trading quarter (Q4) of 2014, according to figures released this week.
The latest Hotel Bulletin: Q4 2014, from HVS, Zolfo Cooper and AM:PM, revealed that hotels across 12 key UK cities surpassed pre-downturn RevPAR with a 19% average year-on-year increase. Only Belfast, Birmingham and Newcastle were marginally short of this goal.
Russell Kett, HVS chairman, said: “The strong performance by UK hotels should have resulted in improved profitability and helped to boost values. We would expect this to be sustained throughout 2015 and potentially beyond with the sector remaining attractive to investors.
“A number of high profile events in the UK this year will help boost occupancy levels as will the fall in fuel prices which gives consumers more disposable income. The outcome of the General Election in May could also provide stimulus to investors’ confidence.”
Despite this the bulletin said that there was ‘initial signs’ that the hotel market is seeing ‘performance maturity’ with occupancy growth beginning to plateau.
The bulletin added that increased competition from new supply is also likely to make growth more challenging, potentially prompting some investors to consider selling.
Kett said: “As occupancy starts to level out the emphasis for operators now has to be on improving achieved room rates, although this is more difficult in areas where there is strong growth in supply.”
The bulletin found that in terms of new builds, budget hotels still dominate the UK hotel development market with the sector representing 34% of current supply and 47% of the markets active pipeline.#
Image courtesy of VisitEngland/Diana Jarvis
