2006 a Record Year for UK Hotels
FEBRUARY 5, 2007. As the clock struck twelve on 31 December 2006, UK hoteliers should have been cracking open the champagne as they took stock of a very successful year, say PKF hotel consultancy services. December's preliminary data confirmed that 2006 was a record year with UK hotels achieving their highest rooms yield growth rate for a decade.
In London, the average daily rooms yield for 2006 was 16.8% higher than the 2005 figure of lb79.84 - an annual growth rate not seen since 1985. Adjusted for inflation, the rooms yield of lb93.28 reported by London hotels is the highest since 2000. Strong demand for hotel rooms in the capital drove this exceptional performance with both average daily room rate and occupancy rising by 7.2% and 9.0%, respectively.
Marketing campaigns by London hotels and promotional offers from airlines played important roles and may have been instrumental in the 15.7% increase of visitors to London -particularly from Eastern Europe, the Middle East and the emerging markets of Asia including China. Undeterred by the weakness of the US dollar in 2006 and empowered by greater wealth - helped by high energy prices - these visitors helped fill the rooms of first class and deluxe hotels in the capital which were traditionally occupied by North American and Japanese tourists.
In the regions there was a similarly strong performance in 2006 with rooms yield growth of 4.6% - the highest rate since 1998 - to lb52.28 compared to lb50.00 in 2005. Adjusted for inflation, rooms yield for regional hotels in 2006 is also the highest since 1998. This is due to higher average daily room rate and occupancy - up 2.4% and 2.1% respectively in 2006 compared to 2005. Strong demand for hotel rooms from both domestic and international business travellers was an important driving factor towards this impressive performance, as were the various local events and conferences across the regions that draw in additional leisure visitors.
Robert Barnard, partner for hotel consultancy services at PKF, said: 'We predicted earlier in the year that 2006 would be an impressive one for UK hotels, but our predictions are conservative compared with the final figures.
'Looking forward to 2007, it looks likely that the UK hotel market will see continued growth. To quite what levels however, is dependent on the economy, politics and events worldwide. With UK interest rates on the rise and another hike expected, the spectacular growth rates seen this year are likely to be toned down in 2007.'
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