Profits fall at UK provincial hotels
Rising food and fuel prices have led to a fall in profits for UK provincial hotels, according to a recent report. Average daily income for the chain hotels covered in the HotStats survey, fell 6.9% in June to £39.69 per available room.
Slowing demand also affected profits, with average occupancy falling 2.1 per percentage points to 74.6%. Combined with a weak growth in room rates, this resulted in a 1% drop in revenue per available room to £56.54.
“Given an increasingly competitive environment, rising costs cannot be passed onto the guest, so are directly hitting the bottom line,†said Jonathan Langston, managing director of TRI Hospitality Consulting which conducted the HotStats survey.
Hotels in the capital fared much better during June when 109 of the 512 sampled reported a relatively positive month. Although year-on-year occupancy dipped by 1.5 percentage points, corporate and leisure demand remained buoyant.
Average occupancy of 85.5% in London enabled a 5.7% increase in achieved average room rate, leading to revenue and profit growth.
“Achieved average room rate in London increased well above inflation, enabling hotels to maintain the same 2% level of growth over two consecutive months,†said Langston.
By Linsey McNeill
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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