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London Hotel Sector Set for a Positive 2013

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Hotel Investment  London  2012 Olympic Games  RevPar  STR Global  London Hotel Performance  Elizabeth Randall Winkle 

By - Monday 21 January 2013

London Hotel Sector Set for a Positive 2013

Solid growth is expected in the London hotel sector this year according to a new report from STR Global and Tourism Economics. The report predicts strong growth in both supply and demand in the coming year.

Into the specifics the firm forecasts a 3.5% increase in London hotel supply, against a 2.9% growth in demand. This supply overhang is expected to translate into a 0.5% decrease in occupancy levels. Revenue per Available Room is also expected to fall 1.6% fuelled by a 1.1% in the Average Daily Rate, which is predicted to fall to £139.13.

"RevPAR is predicted to increase in June and July, driven by a surge in occupancy from the return of the regular summer guests", said Elizabeth Randall Winkle, managing director of STR Global. "However, this will be offset by a drastic decline in ADR the following month, resulting from the 2012 Olympic Games being hosted in London during August of last year. Unfortunately, the continuing economic uncertainty across Europe makes forecasting a challenging task and subject to change."

Range of monthly RevPAR forecasts throughout 2013

UK Housing - Construction vs Prices

(Click the chart to see the full size version

Across London only one area is expected to see occupancy and RevPAR grow. The firm predicts an 80% increase in Upper Midscale hotel occupancy and a 0.4-percent increase in RevPAR fuelled by the fact that demand is expected to outstrip supply.

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