10 November 2021, Virtual
London, UK - November 2021
London, UK - December 2021
London hotels are growing revenues at double the rate of properties outside the capital, a new report has found.
The total revenue per room (TrevPar) is now 35 per cent above the regional UK, compared to 16 per cent in 2000 - TrevPaR is a performance metric in the hotel industry. TrevPaR is calculated by dividing the total net revenues of a property by the total available rooms.
The study, Benchmarking Beyond RevParfrom hospitality research firm Hot Stats, discovered that total revenue levels at London hotels increased by 25.3 per cent over the past 15 years, compared to an increase of just 7.6 per cent for regional UK hotels.
The widening in favour of the capital in recent years can be heavily attributed to the elevated profile of London as a tourist destination, the study says. The number of visitors to the capital has increased by 70 per cent over the last 15 years, to 31.5 million in 2015, with London now the second most visited city in the world.
The spread was further exacerbated when regional hoteliers lost significant ground to properties in the capital during the global financial crisis. The exposure of regional hotel markets to fluctuations in domestic GDP meant that top line performance fell to its lowest level since the turn of the century in 2011 (£93.55), after three consecutive years of decline.
In contrast, TrevPAR at London hotels increased by 13.2 per cent to £132.52 in the period from 2009 to 2011. The performance gap was at its widest in 2012, at £42.99.
However, since 2012, provincial hoteliers have been closing the gap, achieving a TrevPAR CAGR of 4.1 per cent per annum in the three years to 2015, compared to 1.5 per cent per annum at London hotels during the same period.
London hoteliers have not always outpaced their Provincial counterparts. In 2003, when hotels in the capital fought their toughest battles as the city’s international demand sources were hit by multiple global incidents, including 9/11, SARS and the Iraq War, regional TrevPAR was £5.35 ahead of London.
The study polled around 45,000 hotel rooms across the UK over a 15-year period.