LONDON, England – A new study by hospitality intelligence firm, HotStats, identified that TrevPAR at hotels in London is now 35% above the regional UK, compared to 16% in 2000.
The study, Benchmarking Beyond RevPAR, which polled a consistent sample of nearly 45,000 hotel bedrooms across the UK over a 15-year period, discovered that total revenue levels at London hotels has increased by 25.3% over the last 15 years, compared to an increase of just 7.6% 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 number of visitors to the capital has increased by 70% 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% 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 annum in the three years to 2015, compared to 1.5% 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.
In 2015, TrevPAR at London hotels was recorded at £143.04 compared to £105.90 at regional UK hotels, a gap of £37.14.
Pablo Alonso, HotStats CEO said of the results “TrevPAR performance at hotels in London has plateaued slightly in the last 12 months. Whilst the number of visitors to the capital continues to grow, the pace of this demand increase is now being matched, if not exceeded, by growth in supply.
This has enabled provincial hoteliers to close the gap on London and they continue to outpace the growth at hotels in the capital in 2016.”