Hoteliers hope for improved occupancy after the Olympics


London’s hoteliers will hope for better luck during the Olympic Games after figures suggested room occupancy fell sharply in June.

Hotels in the capital were faced with tough comparatives after last summer’s record-breaking figures, benchmarking data analysed by PwC showed.

Occupancy levels dropped from 90% in June last year to 82%, a fall of around 8.4% overall, as hotels counted the cost of a disappointing month.

However, hotel trading for the half year to June offers a more mixed set of results.

The average daily rate (ADR) for rooms went up by 1.8% to £154 compared to the same period last year, the data from STR Global shows.

Occupancy levels fell over the six months, but only by 1.2%, to offer a marginal RevPAR (revenue per available room) gain. Hotels enjoyed a RevPAR increase of 12.7% during the same period last year.

PwC head of hospitality and leisure research Liz Hall said: “Weekly trends data for July have shown continuing declines in key metrics although there are signs of a welcome uptick in the last week of the month.

“There are a number of possible reasons for the recent drop in hotel performance: the deteriorating economic situation, extensive new supply in the capital, the Jubilee holiday which saw corporate travel disrupted by the two bank holidays, a pre-London Games dip, and difficult occupancy comparables have all taken their toll.

“The earlier start to Ramadan compared to 2011 may also be a factor.”

Hall said the second half of the year would be heavily influenced by the impact of the Olympic Games and the general economic outlook. Hopefully business travellers and visitors who have avoided London during the event will return, Hall added.

“PwC has consistently warned against the inflated expectations of some hoteliers for a London Games bonanza, but the dawning reality after this first week’s events is that London has been much quieter than even we expected,” said Hall.

“While we still expect to see some occupancy growth, overall performance in the third quarter will be dictated by the extent to which hoteliers are able to hold on to their planned rate increases during the Games.”