10 November 2021, Virtual
London, UK - November 2021
London, UK - December 2021
Fourth quarter slump hits figures
A slump in business in the last three months of 2008 hit London hotel profits, TRI Hospitality consulting said.
Its HotStats survey for the year showed a "minimal decline" in profits of 0.2% from a daily profit of £63.79 per room in 2007 to £63.69 in 2008.
The consultants, who quizzed 100 London hotels, said the industry had enjoyed nine months "good trading" until the end of September.
During those nine months, the hotels enjoyed a 4% rise in total revenue and a 3% increase in profit.
But TRI said that conditions hade become "increasingly challenging" since the end of September.
In the fourth quarter, as the banking crisis and economic downturn kicked in, total revenue in London dropped by 6%.
This led to a 9% fall in profits. In December alone, London hotel profits slumped by 10.8%.
UK regional hotels reported a 7.2% drop in profit for the full year to £32.49 per available room.
Revenue also decreased by 2.5% to a daily figure of £99.71 per room.
The decline in the last three months was "considerably sharper" with total revenue dropping by 8% and profits by 16%.
TRI questioned 400 regional hotels in its survey.
David Bailey, TRI's deputy managing director, said: "The downturn during the fourth quarter in 2008 is confirmed by our December data and points to the challenges that hoteliers face in the coming months.
"For some hoteliers however, particularly in London, the weak pound stimulated extra inbound demand over Christmas, which at least took some of the sting out of December trading."
TRI also polled 116 general managers of hotels about their views on the downturn.
Nearly two thirds (64%) said they expected to be less profitable in 2009 than in 2008 but 22% said they expected profits to stay the same.
43% expected demand to drop by up to 5% in 2009 compared with 2008 while nearly one third expect a drop of more than 5%.
But 26% expected either an increase or no change in2009.
The survey also revealed that 80% of general managers had cut staff in the last quarter.
"Given current market conditions it is no surprise that the majority of general managers expect a decline in profit.
"But the range of responses is broader than expected given the current all pervading climate of gloom.
"Nearly one third are determined to see the glass as half full rather than half empty," Mr Bailey said.