Find the right hotel
Important! This article is written by orangesmile.com editors and is protected by copyright law. The article can only be re-used with a direct link to www.orangesmile.com
London Hotels to Suffer from Oversupply in 2013
Seems, 2013 is not going to be an extra profitable year for hotels in London. This year, the supply of hotels in the capital of the UK is expected to add 3.5%, while the demand is likely to increase by 2.9% only.
As it is indicated in the newest data by STR Global, this excessive supply will make the occupancy fall by 0.5%. Consequently, ADR will lose 1.1% and estimate £139.13 (US$222.39), and RevPAR will fall down by 1.6%. RevPAR is expected to get back to its ordinary level only in June and July, when regular summer guests will return to the city. However, August will be significantly different comparing to August 2012, when London hosted the Olympic Games. The continuing economic uncertainty also doesn’t add much optimism to forecasts.
If analysed by segments, only upper midscale hotels are forecasted to increase their occupancy and RevPAR levels. The estimated increase of RevPAR is 0.4%. The reason for this is that midscale sector is the only hotel sector in London, where demand still overcomes supply. The upper midscale sector is also the only sector with the expected occupancy of over 80%.
The performance of hotels in the provincial UK is also expected to be similar to London. There will also be oversupply, but ADR will be increased a little, and this fact may keep RevPAR steady. The growth of hotel supply in the regional UK is expected to be 1.4%. This will help it overcome demand by 0.8% (the expected growth of demand is only 0.6%). The occupancy will, consequently, decline, but the growth of ADR of 1.7% will make RevPAR grow to £41.54 (US$66.40).
Previous article / Back to news index
Stay in touch with the latest news of a worldwide hotel industry. All up-to-date analytics, reports, and news about hotel business trends on OrangeSmile.com.
