Profits Decline for London Hotels in November 2012

Profits declined for UK hotels in November 2012, with hotels in London registering a 5.6 percent decrease in profit per room.

The recent HotStats survey of around 560 full-service hotels in the UK, conducted by TRI Hospitality Consulting, a UK based hotel consultancy group, reported that the euphoria of summer profits from the 2012 London Olympic Games has given way to the worst drop in profits in any one year.

In November 2012, hotels also recorded 1.4 percent year-on-year increase in food and beverage revenue, to £35.50 per available room, and a 2 percent decrease in Total Revenue per Available Room (TrevPAR), compared to November 2011.

Room rates also declined by 7.2 percent for Best Available Rate, 2.6 percent for the leisure segment, and 6.7 percent in the groups or tours segment, leading to a decline in the average room rate of 2.7 percent, to £136.41 in November 2012, from £140.19 during the same period in 2011.

Jonathan Langston, the managing director of TRI Hospitality Consulting, said, ‘Not even a 3 percent increase in the number of visitors to WTM, to almost 29,000 trade visitors, was enough to save face for hotels in London and the drop in achieved average room rate for November was the greatest year-on-year margin of decline in this measure in 2012.

Although volume remained strong in the city and hotels in London are undoubtedly on course to achieve a third consecutive year of profit growth, it is unlikely that hoteliers will be popping champagne corks as they look to more challenging times ahead.’