27 January 2009

December hotels performance hit by stay at home families

Cost conscious families stayed put over Christmas rather than taking festive hotel breaks, a new study shows.

Room rate, occupancy and rooms yield all fell for most in December, according to preliminary monthly figures from PKF Hotel Consultancy Services.

Room rate in London dropped from £139.33 in 2007 to £138.03 - a fall of 0.9% - while occupancy declined by 1.2%. Overall, this meant a 2.1% decline in rooms yield from £102.07 in 2007 to £99.89 in 2008.

Year to date figures were a little more positive, with London achieving a 2.7% increase in rooms yield for the year from £114.08 in 2007 to £117.19 in 2008. This was mostly driven by a 4.6% hike in room rate, according to PKF.

Hoteliers in the regions felt the effects of the downturn more severely with rooms yield dropping by 11.6% in comparison to December 2007. This was a combination of a 9.4% decrease in occupancy, from 62.2% to 56.3%, and a drop in room rate from £73.20 last year to £71.42.

Even Liverpool, which has benefitted due to its status as European Capital of Culture in 2008, had a disappointing December recording a loss in rooms yield of 14.5%.

Year to date figures were also gloomy for the regions as a whole, with an overall 2.2% decline in rooms yield for the year. However, room rate managed a 0.7% increase, from £75.61 in 2007 to £76.14 in 2008.

Hotel consultancy services partner Robert Barnard said: "The decreases experienced by hoteliers this month are not surprising considering the current climate.

"While in recent years UK families may have chosen to take a break over the Christmas period by staying in a hotel, or families from overseas many have chosen to travel to the UK for a holiday, this year most will have opted to stay at home and save money ahead of what is expected to be a difficult 2009.

"Business travel always drops off in December, but this year it would have been further diminished as companies try to cut costs.

"Looking forward into 2009, the weak pound may help bring some tourists back to the UK and therefore into hotels, but on the whole, it will be a more testing year for hoteliers than the last few and they should be continuing to prepare themselves for a downturn in business."

by Phil Davies