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Hotels in the UK Will Feature Slow Recovery, London is an Exception

Hotels in the regional UK will recover very slowly, and it may take them up to five years to get back to pre-recession levels. This statement is mentioned in the latest research by TNS and Deloitte.

The survey covered approximately 100 senior hotels in the country. According to its results, 41% of respondents think regional UK hotels will struggle with consequences of recession during approximately 5 years. 19% are sure it will take even longer than 5 years, and 35% anticipate regional UK hotels to recover within 3 years. The South East market (excluding London) is expected to recover faster than other parts of the UK. More than a half of respondents believe it will finally reach pre-2008 level in three years. Hotels in London keep enjoying their high RevPAR that is even higher than the previous peak.

As it is stated in the report, the development of the local economy will be one of the crucial factors of hotel performance. There is a strong correlation between GDP and RevPAR. If occupancy doesn’t start increasing, hotels will have no opportunity to boost their rates. Therefore, the prospect for improvement will be very cloudy. London remains an important international hub, and this fact adds to performance of the hotel market. High rates in London hotels are expected to continue in 2013 as well. More than a half of respondents believe in this because they consider London an important gateway city.

London hotel will also remain a very popular form of investment. The capital will attract a lot of capital from abroad. At the same time regional UK is likely to keep suffering from debt funding difficulties and a disparity between sellers and buyers because of price expectations.

25.11.2012

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