Hotel profitability increases not nationwide

TRI Hospitality Consulting recently forecast an increase in profitability for hotels in London, stating that the recovery will be much slower for hotels elsewhere. The predictions put the increase of revenue per available room (revpar) at 2.5% with an increase in occupancy of 1.5% during the course of this year, mostly as a result of the increase in international business demand.

Profitability in hotels outside London is expected to dip slightly this year, although TRI Hospitality Consulting is expecting it to benefit from almost double-digit growth in 2011. Total revenue per available room in 2010 is expected to dip by 2% while gross operating profit per available room is expected to decrease by 3.2%. These are forecast to increase again by 4% and 9.1% respectively in 2011.

This forecast is supported by figures from STR Global, a market research company, that saw revpar in London rise by 8.1% but fall by 4.2% in other regions in the UK in the 28 days to January 23rd. This trend had a few exceptions, such as Manchester, which saw revpar increase by 2.2% during the same period (although this was achieved by a higher than average increase in occupancy, which offset a fall in average room rate).