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London hotels post 4.7 per cent profit increase despite poor December


London hoteliers weathered the storm posed by a poor end-of-year performance to record a 4.7 per cent increase in profit per room for 2011, according to the latest HotStats survey from TRI Hospitality Consulting.

Much of this increase was down to a 6.1 per cent rise in Revenue per Available Room (RevPAR) lead by a seven per cent rise in the achieved average room rate for London hotels in 2011, up to £131.03 from £122.45 in 2010.

However, this success was tainted by three consecutive months of year-on-year profit decline for London hoteliers, culminating in a 9.2 per cent drop in profit per room in December – the capital’s biggest year-on-year monthly profit fall since August 2009. Furthermore, a dip in revenue for food and beverage (-5.5 per cent) and meeting room hire (-4.2 per cent) reduced the increase to just 3.8 per cent Total Revenue per Available Room (TRevPAR).

Managing director of TRI Hospitality Consulting, Jonathan Langston, said: “Following a strong start to the year, London hotels limped to the finish line with a 4.6 per cent decline in profitability recorded in the fourth quarter of 2011. And whilst industry commentators will continue to speculate about the forecasted performance for London hotels during 2012, it is increasingly evident that the loss of demand due to postponed and cancelled business and regular visitors to the city choosing an alternative destination, will be offset by the considerable demand created by major events in the capital throughout the year, including the Queen’s Jubilee, the Farnborough Air Show, and of course the Olympics.”

Provincial hoteliers reported a 3.2 per cent drop in overall profit per room, with continued economic uncertainty and February’s snowfall noted as key factors.

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