London Hotel Rates To Fall in 2013

The hospitality industry is predicting a fall in London hotel rates in 2013, due to the supply of rooms outstripping the demand from a weak economy.

Research by PricewaterhouseCoopers (PWC), a UK based consultancy company, suggests that while London hotels are still enjoying a post Olympics boom, the prices are expected to decrease by around 77 percent from the unusual average daily rate of GBP143 per room, reflecting a post-Olympics hangover.

Liz Hall, the head of hospitality and leisure research at PWC, said, ‘The London hotel market has demonstrated remarkable resilience since the start of the recession.

This has been helped by one-off events such as the Jubilee and 2012 Games, which have driven some highs and lows (reduced business travel) this year.

It’s hard to feel confident about 2013, there will be winners but a weak economic and travel environment, a fight for market share and more new rooms to fill mean many will feel the hit.

There has been a flurry of high-end, boutique and branded budget openings across London, often in newer hotel locations. These new products clearly differentiate themselves and offer lower rates to gain market position and lure consumers away from mid-range products.

With at least 2,400 high-end and boutique rooms set to open in London in the next couple of years, the need to differentiate and reinvent the middle ground becomes ever more necessary.’

UK hotels outside London have registered a flat average room rate of GBP58.39 per room in 2012, which is expected to remain the same for 2013.

Robert Milburn, the hospitality and leisure head at PWC, said, ‘More supply, changes to company procurement policies, sustainability issues around travel and communications technology have all left their mark.

However, renewed optimism for a modest revival in conference and event demand and a continued resurgence in business travel should ensure the slow UK hotel recovery continues.’


More Britons opting for package tours

The popularity of package tours is increasing as cost-conscious consumers guard themselves against hidden costs.

Tour operators say that Britons have become cost-conscious because of the financial crisis and are having to find more innovative ways to holiday in style.

Thomson Holidays said that the demand for package tours has increased. The company, considered to be the biggest tour operator in Europe, said that most of its holidays have been booked, and that compared to the same time last year, fewer seats remain to be booked. Package holidays are in high demand as budget-conscious holiday goers consider them to be more secure, thanks to their fixed prices and no hidden charges. With the increase in demand, it is expected that overall summer bookings for the UK will continue to outperform the wider industry.

Another factor in the healthy holiday uptake is that British tourists are keen to take advantage of the strength of the pound against the euro, as the currency differential currently makes visits to other parts of Europe even more inviting. The weather in Britain has also contributed to the increase in outbound tourism, with Brits determined to find dry, sunny weather before the holiday period draws to a close.

Peter Long, chief executive of TUI Travel Plc, said, ‘Northern Europe has been pretty consistently bad from a weather perspective over the last couple of months and that has benefited us with people deciding to book.’

Some of the most popular destinations currently attracting tourists are Majorca, Ibiza and Menorca. Turkey, Egypt, Tunisia and Morocco are also well favoured by those looking to holiday on more distant shores.

Tour operators are also advising that those looking to control costs abroad should take a prepaid credit card for more predictable expenditure.