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Industry reacts to rising UK hotel rates

The meetings and events industry has reacted to the 6.7 per cent year-on-year increase in UK room rates

Pictured: Louise Goalen, director of venues, Top Banana

The meetings and events industry has reacted to the 6.7 per cent year-on year increase in UK room rates to a high of £193.90 per night.

Director of venues at Top Banana, Louise Goalen said: "The continued escalating rates for hotel bedrooms in London is a case of demand and supply, the weak pound has allowed overseas visitors to enjoy London more cost effectively. Once the demand drops rates should return to a 'normal' level.

"From an events perspective, clients looking for residential meetings in London are struggling to get bedroom availability, and when we manage to get hold of bedroom stock, the total cost massively exceeds client budget, and we end up moving out of the capital benefiting other destinations."

Account Manager at drp, Amy Deehan said: “I have noticed a shift in venue rates over the past few years, however through various venue searches and feedback, clients are still willing to pay the price to be in this city. 

"When you decide that an event will take place in the city, you are exposed to many great transport links, incredible venues and a wide range of amenities suitable for all needs and specific requirements.

"I have personally noticed an increase in service, and portage charges which can really make a substantial impact on how we do business. However, when it comes to the topic of Brexit, rates don’t seem to be affecting this, as we are still unsure whether we will have a deal or no deal result.

"Working closely with our venue sourcing team, Venuepot, we are noticing a steady pace on events in London but also a greater rise in search of venues out of London too; especially in the Midlands region. Anything can change at any given time, so this is something we will be keeping a close eye on and monitoring in the months to come.”

HotStats CEO Pablo Alonso put the record high down to an uplift in staycations since the Brexit vote, as well as an increase in international visitors to the UK. Room occupancy was also up by 1.7 per cent to 87.1 per cent.

The robust demand levels were led by the leisure segment, which accounted for 36 per cent of accommodated room nights this month, well above the annual average of 31.9 per cent for the 12 months to July 2018.

Growth was also supported by increases in the achieved rate in the commercial segment, including the corporate (up 3.5 per cent) and residential conference (up 11.9 per cent) sectors.

“Soaring demand levels, which have primarily been led by the leisure segment have helped hotels to drive top line revenues in this month over the last couple of years,” said Alonso.

“The strength of demand has been attributed to an uplift in staycations since the Brexit vote, as well as an increase in international visitors to the UK. The improvement will be to the delight of hotel owners and operators as July presents an opportunity to drive revenue and profit which previously did not exist.”

The growth in top and bottom line performance for hotels in the UK in July was mirrored and exceeded by hotels in London, with room occupancy soaring by 4.7 per cent to 92.1 per cent. In addition, achieved average room rate increased by 6.7 per cent year-on-year to hit a high of £193.90.

Commenting on the news, Bill Prosser of The Competitive Edge said: “We have found that while some rates are moving up there is still the possibility to negotiate – the four-star corporate hotels are still in a very competitive environment with some overcapacity - especially in low season and at weekends.

“As London does not have a large convention centre relative to the number of bedrooms on offer we don’t see the very high peak rates you often see in cities like Paris and Frankfurt – London rates are more consistent.

“The biggest change we have seen in our business in the last five years is that most if it is long haul where the majority of our clients were from Europe in the past.

“These groups have higher airfares to get here and generally do not spend all of their time in London – so the London hotel cost has become a smaller proportion of the total cost of the event – and therefore less significant.”

Despite the overall increase in visitor numbers to the UK, hotels in leisure-led Stratford-upon-Avon saw room occupancy increasing by 1.8 per cent to 81.8 per cent, accompanied by a 2.4 per cent decline in achieved average room rate to £92.24.

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