London is in danger of pricing itself out of the international corporate market, according to some of the capital’s leading destination management companies (DMCs).
Speaking at an advisory board meeting hosted by Chewton Glen Hotel, owners and managers of London’s DMCs said they had enjoyed an unprecedented period of business as London hotels benefited from a strong euro, but feared that rising rates will make their products uncompetitive.
Wedgewood’s Aidan Ford said: “London is in danger of pricing itself out of the market. We are on the cusp. The strong euro has made London very attractive this last year, but hotel rates are increasing inexorably. It’s understandable because the demand is huge and people are paying the prices that the hotels are asking – but the hotels have to remember that just because people are paying the prices now, this does not mean that they’re happy about it, and as soon as clients can choose an acceptable and less expensive alternative destination, they will do just that. London hotels need to be reminded that they’re not only competing with each other, but with similar properties across Europe, from Lisbon to Istanbul, where prices are much more competitive.”
The warning comes after a summer when London hotels announced London enjoyed an ‘extraordinary’ 92.4 per cent occupancy during July according to TRI Hospitality Consulting’s hotel industry analysis released last week. The average room revenue yield for the month was the highest ever recorded at £148.65.
Spectra’s Wendy Fulcher said hotels were getting greedy: “They need to take a long term view and ensure that in the run-up to the Olympics we don’t turn off our customers. We want them back when the Olympics are finished!”