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Revenues of Hotels in the UK to Decrease in 2013

News The newest report by PricewaterhouseCoopers suggests that RevPAR of hotels in the UK is likely to fall down by 3.5% in 2013. Hotels in London are likely to face the highest fall in revenues – minus 7.2%, while provincial UK accommodations will see the fall of 0.7%.

According to PwC, the fall of revenues of London hotels is simply inevitable. This will be a kind of response to high revenues of the Olympics. Moreover, new hotels will increase the supply and, thus, make occupancy rates go down. The occupancy of London hotels is expected to fall down by 3.6% in 2013 and reach the level of 77.2%. This will also cause the average daily rate to fall down by 3.5% to £137.70 (US$220.98). However, there is a chance that London will keep attracting new visitors simply because of its status of one of the world’s leading cities. This was one of the main reasons why London has been very resilient since the beginning of the global crisis. Even though RevPAR fell down by 5% in 2009, it later was able to rebound by 25% and even reach a new record.

When it comes to describing the potential development of hotels in the regions of the UK, the situation here is different from London. Demand for hotel rooms in the province is dependent on the domestic economy, which has to face many serious problems, such as the on-going financial crisis and high inflation. Here RevPAR is still below the level of 2007. Even though the current occupancy is rather good (near 70%), hoteliers cannot increase their daily rates and get revenues back to pre-recessional level. As it is mentioned in the forecast by PwC, both RevPAR and ADR are likely to remain flat in 2013. The average daily rate will freeze around £58.45 (US$93.28), and revenue per available apartment will be approximately £40.02 (US$63.87).


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