Occupancy Softens in London's Hotels in Q4 2019, Says Hotel Market Tracker

  • HVS
  • 01.30.20
Hotels in London saw RevPAR growth of 0.9% in Q4 2019, to £135.25 compared with the previous year, according to the latest UK Hotel Market Tracker: Q4 2019, produced by HVS London, AlixPartners and STR.

Average occupancy for hotels in the capital dropped back slightly in the final quarter of the decade to 84.8%, although average room rates rose 1.9% to £159.53.
The UK’s regional hotels saw RevPAR [rooms revenue per available room] fall in the quarter, down 2.7% to £50.73 and occupancy down marginally to 73.6%, while room rates fell by 2.1% to £68.94.
“Softening occupancy will be a concern in London, particularly given the high number of hotels projects in the pipeline, although the fact room rates have risen by nearly 2% is encouraging,” commented HVS chairman Russell Kett.
“Any improvement in yields will take longer to reach provincial hotels but they should start to see some change as we move through 2020. However, the active hotel pipeline, currently at 6% of supply outside London, will continue to prove challenging as it will in the capital.”
With greater political certainty coming from the general election, transaction volumes in London saw an increase in Q4 to a value of £1.5bn, although transactions in the regions were down 38% to £2.2bn. The largest transaction in Q4 was the sale of the 211-room Fairmont St Andrews golf resort in Scotland to Great Century for a reported £135m.
Moving forward investors are expected to be cautiously optimistic about a resurgence in transaction activity.
“The recent UK election result and the ensuing Brexit decision is likely to make the UK more attractive to many investors,” commented HVS chairman Russell Kett. "This is likely to have a more immediate impact on transaction yields in London during 2020, although any improvement may be tempered by the pipeline of luxury hotels in inner London.” [ENDS]
You can download a copy of UK Hotel Market Tracker: Q4 2019 at https://www.hvs.com/article/8683/uk-hotel-market-tracker-q4-2019/?campaign=email

HVS, is one of the worlds leading consulting and services organization focused on the hotel, mixed-use, shared ownership, gaming and leisure industries, was established in 1980. The company performs 4,500+ assignments each year for hotel and real estate owners, operators, investors, banks and developers worldwide. HVS principals are regarded as the leading experts in their respective regions of the globe. Through a network of some 60 offices and more than 350 professionals, HVS provides an unparalleled range of complementary services for the hospitality industry

want to read more articles like this?

want to read more articles like this?

Sign up to receive our twice-a-month Watercooler and Siegel Sez Newsletters and never miss another article or news story.