Economy

Room yields jump for townhouse and boutique hotels

The townhouse and boutique segments of the hotel industry were the highest performing in 2016, according to a report from accountancy and business firm BDO.

In its ‘Hotel Britain 2017’ report, the rooms yield for townhouse and boutique hotels increased by 7.9% to £255.03. The next best performing segment was the international deluxe hotels, with rooms yield increase of 4.7% to £149.06.

Business class hotels were the worst performing with rooms yield down by 14% to £70.29.

The average annual room rate in London increased by 1.1% to £151.45, while the annual room in regions grew by 1.7% to £64.24. Daily rooms yield across the UK rose by 0.7% to £75.64.

Robert Barnard, partner of BDO, said: “The impending Brexit negotiations over the coming months will shape the sector going forward.

“Hoteliers will need to look for both short and long term solutions to the potential tightening of the free movement of workers around the EU, profit margins already being squeezed by the rise in food costs and the continued growth of the sharing economy, among many other challenges.”

The report made predictions for the rest of the year, claiming hotels will outperform in the leisure market as well as a change in food and beverage menus.

It also predicted that the labour crisis would necessitate change and there would be a “crackdown” on the sharing economy. This would be due to the UK government introducing new regulations.

The report also suggested that 2017 would bring tensions between hotel operators and hotel owners to a “fever pitch”, as brands would continue to develop and owners would need to look for ways to maximise their returns.

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