London hotel room rates have increased by an average of 2 percent to £154 in the first six months of 2012, according to the research findings of Price Waterhouse Coopers (PWC), a UK based professional services firm.
The research also reported that slow growth has decreased occupancy by 1.2 percent, with only a marginal gain in RevPAR for the six months, compared to a 12.7 percent increase in RevPAR for the same period last year. While June 2012 occupancy decreased by 8.4 points to 82 percent, occupancy has continued to decline up to the beginning of the Olympic Games at the end of July.
Liz Hall, the head of hospitality and leisure research at PWC, said ‘Weekly trends data for July have shown continuing declines in key metrics although there are signs of a welcome uptick in the last week of the month.
There are a number of possible reasons for the recent drop in hotel performance: the deteriorating economic situation, extensive new supply in the Capital, the Jubilee holiday which saw corporate travel disrupted by the two bank holidays, a pre London Games dip, and difficult occupancy comparables have all taken their toll. The earlier start to Ramadan compared to 2011 may also be a factor.
Just how the second half of 2012 turns out will depend on how London fares during the Games and of course the economic outlook. We can only hope there will be some pent-up demand post Games as the many business travellers and visitors who had avoided the city return.’