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UK hotel rates to fall in 2018, says PwC

Weaker economic growth, thanks in part to Brexit, is set to cause UK hotel rates fall this year according to PwC
07/03/2018

Pictured: PwC predicts a large supply spike in London this year

Lacklustre economic growth is set to see UK hotel rates fall this year, according to the PwC’s UK Hotels Forecast.

There is also set to be a large supply spike in London this year, with more new rooms opening than during the last growth peak in 2012.

The report’s authors, hospitality expert David Trunkfield and senior economic adviser at PwC Dr Andrew Sentence, said “Weaker UK economic growth is expected to persist in 2018, as considerable uncertainty still relates to Brexit.

“We estimate GDP growth to remain at around 1.5 per cent in 2018, edging up to 1.6 per cent in 2019. In addition, there remain pressures on UK household spending and real income growth is expected to continue to be subdued in 2018.

“While stronger global growth should help cushion inbound business and leisure travel to the UK, weaker UK GDP is likely to depress average daily rate (ADR) growth.”

Expected high levels of new supply are set to dampen occupancy during 2018, especially in London. A marked supply spike in new room openings in 2018 means London could see more than 9,000 rooms opening – 1,000 more than opened the Olympic year of 2012.

The authors added: “There’s still some growth; London enjoys very high performance metrics and around the UK, key regional cities are also enjoying solid metrics and in many cases record occupancies.”


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