This has been a great season for Great Britain, but with the Olympics over and winter drawing in,
London business is beginning to feel the chill after the Holy grail of tourist events leaves the city in its wake.
London’s hotels and B&B’s marked a whopping 90% increase in profits over August, but many agree they will fall short next year. With the state of the British economy and on-going Eurozone strife, many General Managers feel that it’s looking bleak for Hoteliers in 2013. A quarter expect their revenue per available room (RevPar) to be lower next year than this.
“Factors such as a stable exchange rate, increasing hotel supply pre and post-Olympics, and challenging market conditions in UK and wider global economy is likely to temper growth in London over the next year”, the report stated.
1/4 expect their revenue per available room (RevPar) to be lower next year than this.
The effect of superfluous rooms is going to alter the figures for next year significantly.
Although extra accommodation was sorely needed for the games, when you consider the
bigger picture it all comes at an awkward time.
‘About 7,000 rooms [have been] added this year, a 6.7 percent gain, bringing London’s total to 114,000 by the end of 2012.’
Unexpectedly, the surge of occupants hasn’t come and gone with the Olympic Torch. Recent HotStats (see details in PDF report) have revealed that the “legacy impact of the Olympic Games is unsurprisingly expected to be more of a long term gain… with almost 54% of London hoteliers expecting an increase in business in the fourth quarter of this year compared with the same quarter in 2011.”
Almost 54% of London hoteliers expecting an increase in business in the 4th quarter of this year
It goes without saying that Hoteliers rely on traditional British holidaymakers, but with the Sterling Pound so strong, enthusiasm for a treat weekend away has dwindled, leaving mostly business trips and foreign tourists to take in the slack.
Regardless of the hotels statistics, the general British public are feeling the impact of the recession and so are holding back on extravagances and mini trips.
So will room prices drop in order to stay competitive? London rooms were hiked up by as much as 70 percent to an average daily rate of £128.59 whilst the Olympics took place. These rates have since gone back to their usual level since the Games finished.
Whether these worries are founded, or simply cautious estimates in troubled times, only time will tell, but London will be awaiting next year and all it promises with baited breath.
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Freddy is an avid traveller. He recently completed the Mongol Rally; A charity drive from London to Mongolia in a granny car. Now back by the seaside in Manly Australia, Freddy looks after In Marketing We Trust a Digital Marketing firm