London hotels saw an increase in revenue and room rates for the month of February 2012, however profits were impacted by rising costs, according to the latest HotStats survey.

For a second consecutive month, growth achieved in Revenue per Available Room (RevPAR), was as a result of an increase in both room occupancy (+1.1 percentage points) to 75.4 per cent and a 2 per cent increase in room rates to £124.77.

However, the report by TRI Hospitality Consulting also found that the 2.5 per cent year-on-year growth in Total Revenue per Available Room (TrevPAR) achieved by London hoteliers was negatively impacted by an increase in costs. In the rooms department, direct expenses per room sold increased by 5 per cent to £13.98, which was primarily a result of an increase in costs associated with third party travel agents. In the food and beverage department, beverage costs suffered a year-on-year increase of 0.7 percentage points to 21 per cent of beverage revenue. And energy costs at London hotels went up by a substantial 0.4 percentage points to 3.4 per cent of total revenue.

“It is clear from their recent performance levels that there is now a complete disconnect between the revenue performance of hotels in London and the rest of the UK. However, in the same way that London hoteliers have successfully managed revenue levels throughout the economic downturn, it is now essential that they manage rising costs, as in the current climate this may be the biggest threat to continued profitability growth,” said Jonathan Langston, managing director, TRI Hospitality Consulting.