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Lowered Occupancy Rates of Hotels in London in October 2016
October was a month of mixed results for hotels in London. According to the data published by STR, hotels in the capital of the UK mostly posted declines in performance. The hotel supply in the city keeps growing and its increase reached 2.9% in October, contributing to decrease of demand (-1.2%). The occupancy fell down by 5.0% to 85.05%. The change in the average daily rate (ADR) was also negative – the decrease estimated 7.7% to GBP149.72. Naturally, declines of two main metrics affected the third important parameter – revenue per available room (RevPAR). London hotels experienced a significant decline of 11.4% in RevPAR to GBP127.23.
October is not the first month of challenging results for hotels in London. Hospitality industry of the UK capital has to face numerous challenges and constantly increasing hotel supply is one of them. Experts mention that demand in October dropped in both weekend and weekday bookings. One of reasons for such poor results is in high results of October 2015, when the country hosted the Rugby World Cup matches and hospitality industry of the UK benefited from increased influx of tourists. Therefore, the year-on-year comparison shows such big decline. On the other hand, the absolute level of occupancy of hotels in London in October 2016 is the lowest since 2008. With hotel supply growing constantly and potential problems due to Brexit, London hotels are sure to face more challenges in future.
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