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Newcastle room rates frozen by hotel openings

Hotstats report reveals average room rates stayed at £65 for Q1 2016, following openings such as Hampton by Hilton
09/06/2016

Pictured: The 160-room Hampton by Hilton was one of several hotels to have opened in Newcastle last year


An abundance of new hotels in Newcastle has "diluted" supply and kept a lid on average room rates (ARR), the latest snapshot from Hotstats has revealed.


The opening of more than 800 branded hotel rooms since January 2015 is thought to have been responsible for the city's average hotel occupancy falling to 70 per cent (down from 76 per cent in 2015), which kept average rates down at £64.80 (from £65 in 2015).


The latest UK Chain Hotels Market Review says: "As regional economic indicators for the North East have remained positive, the supply increase in Newcastle has been significant, with an increase of 817 branded hotel rooms since the beginning of 2015, which have included the 251-bedroom Crowne Plaza Stephenson Quarter, 160-bedroom Hampton by Hilton, 222-bedroom Motel One and the recent opening of the 216-bedroom Premier Inn (The Gate).


"While hotels in Newcastle were able to record a 0.1 per cent increase in revenue per available room in April, year-to-date this measure has fallen by 7.7 per cent, which has primarily been as a result of a 5.7 percentage point decline in room occupancy, suggesting that the hotels within our sample have been impacted by new openings."


Meanwhile, hoteliers in the North West saw profits boosted in April following a 19.5 per cent increase in residential conferences.


Report authors said the residential conference segment contributed to a 6 per cent uplift in ARR to £80.88, up from £76.41 during the same period in 2015.


Hotels in Stratford-upon-Avon also benefited from stronger demand from the commercial sector for the month of April, attributed to an increase in conferences (+ 8.2 per cent) and corporate (+1.5 per cent). It was linked to a 5 per cent increase in ARR to £78.



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