UK hotel rates reached record levels during the second quarter, due to rising demand and inflationary cost pressures.
A report by BNP Paribas Real Estate found that the UK’s average hotel occupancy rate rose to 80 per cent in Q2, up from 70 per cent in the first quarter of the year.
Average daily rate (ADR) also rose from £97.90 in the first quarter to a UK record of £122.86 in Q2. Over the same period, revpar (revenue per available room) at UK properties rose from £68.41 to £98.60.
Rebecca Shafran, senior associate director, alternative markets research at BNP Paribas Real Estate, added: “The latest ADR growth figures are a reflection of the current confidence of hotel operators to raise their rates in light of high demand levels and in spite of the challenging economic backdrop.
“Generational change and increased sentiment towards international travel, events and return to work has a lot to do with this.
“They know consumers within the key 18-65 demographic are willing to spend for experiential or convenience stays and have reflected this in the rate alongside their various overheads.”
But Shafran added that soaring inflation was likely to squeeze consumer spending in the coming months and they did “anticipate some downward rate pressure during Q4”.
This research comes as CWT and GBTA are predicting that global hotel rates will continue rising during the rest of 2022 and throughout 2023.
UK hotel prices have been on the rise for the past few months, with hotel data firm STR noting that ADR for London’s properties reached a new monthly record of £209 in June.