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Budget additions drive down room rates in Glasgow

Room rates and occupancy rose in both the South West and Leeds in May, according to the latest HotStats review

Pictured: an influx of budget hotel rooms in Glasgow has led to a fall in average rates

The average cost of a hotel bedroom in Glasgow has fallen thanks to an influx of budget hotels, says the latest HotStats UK Chain Hotels Market Review.

Average rates were down 2.7 per cent year-on year to £78, reflecting a drop in occupancy of 0.7 per cent to 84 per cent.

The city's hotel sector has seen an increase in supply, with the addition of 563 bedrooms across 2015 and 2016, 64 per cent of which are in the budget segment, the report noted.

Elsewhere, room rates and occupancy rose in both the South West and Leeds in May. Average rates in the South West were up 3.6 per cent year-on-year to £79 in May, while occupancy was also up 0.9 per cent to 78 per cent.

The South West has been one of the strongest performing regions in recent years, with profit per room increasing by 36.9 per cent in the last 36 months to £31.24 in the 12 months to May 2016. 

It was a similar story in Leeds, where occupancy rose 0.8 per cent year on year to 76 per cent in May, while average rates were up 4.3 per cent to £79.

The corporate sector in Leeds remains strong, recording a 6.2 per cent year-on-year rate increase in May to £76. 

Despite a decline this month, the city has also seen a growth in the residential conference sector, recording a 20.8 per cent increase in the last three years.

In addition, a 5.6 per cent year-to-date increase in conference and banqueting spend on a per available room basis contributed to the 4.8 per cent growth in total revenue recorded at Leeds hotels in the five months to May 2016. 

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