Hotels in London have been predicted to enjoy appreciation in their profitability during 2010 while hotel in other provinces of the UK will see a meager fall in profitability during the same year. They are expected to accelerate to circa double digit growth in 2011.
The managing Director of TRI Hospitality Consulting, Mr. Jonathan Langston said, “Our research indicates that there is a close relationship between movements in room’s revenue performance and total revenue performance for both UK provincial and London hotels. However, our analysis also indicates that London hoteliers have the ability to adjust fixed costs more quickly in response to changes in revenue performance, whereas provincial hotels have been less able to mitigate falls in revenue with cost reduction”
London Forecasts:
In 2009, the dramatic losses in commercial demands were efficiently replaced by the leisure related demand from Europe. According to Visit Britain predictions, there will be a 0.8 percent increase in the figures of inbound visitor this year and TRI has assumed that the leisure demand will remain healthy in 2010.
Growth forecasts said that London is a world famous business hub and hence TRI is expecting some pick-up in the demand from this particular sector.
Langston also said, “In November and December 2009, the London full-service hotel market recorded RevPAR growth as the rebound effect from the credit crunch and recession began to gain momentum”
On the whole, TRI predicts that the market of London hotels will increase RecPAR by 2.5 percent in 2010 chiefly due to the increase in the demand of international commercial as well as leisure levels remaining the same as that of 2009.
The continued increase in commercial demand levels will enable the hoteliers of London to optimize on the higher priced business from 2009-2010 levels as the demand generating economies in the UK and overseas have started exhibiting enhanced levels of growth.
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