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Heathrow hotels suffer despite record passenger numbers

Latest HotStats review also reveals West Midlands hotels have made a bright start to 2016

Pictured: Record passenger numbers at Heathrow Airport did not translate into record results for Heathrow hoteliers

Heathrow hoteliers suffered a drop in performance in January despite record passenger numbers, according to the latest HotStats UK Chain Hotels Market Review.

Elsewhere in the UK, West Midlands hotels have made a bright start to 2016.

Hoteliers at Heathrow Airport suffered a 1.1 percentage point drop in occupancy to 71.7 per cent and a 0.8 per cent decrease in achieved average room rate to £70.16 in January. The decline was contrary to the 1 per cent increase in passenger numbers handled by Heathrow Airport to 5.5 million, a record for the month of January. 

The best ever start to a year for Heathrow Airport was on the back of a record year in 2015, as 75 million passengers passed through the UK’s largest airport. The growth in January was attributed to improved travel to and from emerging markets, including Mexico (up 21 per cent) and China (up 16 per cent), as well as the introduction of new routes and new aircrafts. 

Top line performance levels at Heathrow hotels are typically lowest in January, which leaves little margin for cost increases.

Hotels in the West Midlands made a good start to 2016, recording a 2.8 per cent increase in room rate, rising to £71.33 from £69.37 compared to the same month last year.

That said, occupancy remained virtually static, rising just 0.1 per cent to 58.6 per cent.

Over in the East Midlands, hotels in Nottingham suffered a 0.3 per cent decline in average room rate to £58.08 in January, despite a 0.9 percentage point uplift in room occupancy to 59.8 per cent. 

Nottingham hoteliers suffered through the economic downturn and there have been no new additions of note to the city’s hotel supply since the opening of the 202-bedroom De Vere Orchard Hotel in 2012.

However, performance in the city in 2015 was driven somewhat surprisingly by growth in demand from the leisure segment, enabling an increase in the achieved rate in the individual leisure (up 7.3 per cent) and group/tours (up 13.2 per cent) segments. 

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