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Hotel rates up in London and Edinburgh in 2016 while Cardiff struggles

Rates hit record high in Scottish capital, but absence of key events spells woe for Welsh capital, says HotStats

Pictured: London hotel stock increased by 4,500 rooms in 2016 but it didn't affect room rates, which went up 1 per cent to an average of £154

Hotels in London recorded a 1.1 per cent increase in room rates in 2016, in spite of a drop in occupancy, according to the latest data from HotStats.

While the addition of more 4,500 bedrooms of new supply into the capital undoubtedly diluted occupancy, leading to a 0.4 percentage point decline to 80.8 per cent, the 1.1 per cent increase in average rate to £154 helped to recoup the occupancy losses. 

However, hotels in London failed to maintain growth in other departments, suffering a decline in conference and banqueting of 2.7 per cent.

Furthermore, a 36.8 per cent year-on-year increase in rooms costs of sales for the month of December suggests that the proportion of demand booking via high-cost online travel agents into London increased significantly.

Hotels in Edinburgh recorded strong room occupancy levels, which remained among the highest in the UK in 2016, increasing by 1.4 percentage points to 82.9 per cent.

This enabled hoteliers to leverage average room rates by 8.4 per cent to a record high of £114.

The growth in the achieved rate in the leisure (13.2 per cent) as well as corporate (4.6 per cent) segments suggests Edinburgh remains a key economic and visitor hub.

Profit per room at Cardiff hotels fell by 6.1 per cent in 2016 due to the absence of a number of key events in the city, but particularly the demand created by the 2015 Rugby World Cup fixtures.

Despite a positive first half of the year for hotels in Cardiff, during which they achieved a 3.6 per cent increase in revenue per available room (RevPAR) and a 5.1 per cent increase in profit per room, such was the significance of the year-on-year declines in September and October, that the entire year of performance was negatively impacted.

The considerably lower demand levels meant that RevPAR fell significantly in both September (down 16.6 per cent) and October (down 35.8 per cent).

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