PKF UK: Another slow month for UK hotels

26 January 2009: The festive season did not bring much cheer for UK hoteliers in December as room rate, occupancy and rooms yield all fell for most during the month, according to preliminary monthly figures released today by PKF Hotel Consultancy Services. 

In the capital, room rate dropped from £139.33 in 2007 to £138.03 this year – a fall of 0.9% – while occupancy decreased by 1.2% on the same period last year. Overall, this meant a 2.1% decline in rooms yield from £102.07 in 2007 to £99.89 in 2008.

Year to date figures were a little more positive, with London achieving a 2.7% increase in rooms yield for the year from £114.08 in 2007 to £117.19 in 2008: this was mostly driven by a 4.6% hike in room rate.

In the regions, hoteliers felt the effects of the downturn more severely with rooms yield dropping by 11.6% in comparison to December 2007. This was a combination of a 9.4% decrease in occupancy, from 62.2% to 56.3%, and a drop in room rate from £73.20 last year to £71.42 this year. 

Even Liverpool, which has benefitted greatly over 2008 due to its status as European Capital of Culture, had a disappointing December recording a loss in rooms yield of 14.5%. Liverpool still held the title in December, but obviously the attraction to the city was not as great in comparison to last year when the city was gearing up for its 2008 status. 

Year to date figures were also equally as gloomy for the regions as a whole, with an overall 2.2% decline in rooms yield for the year. Room rate did manage a 0.7% increase however, from £75.61 in 2007 to £76.14 in 2008.

Robert Barnard, partner for Hotel Consultancy Services at PKF, commented, “The decreases experienced by hoteliers this month are not surprising considering the current climate. While in recent years UK families may have chosen to take a break over the Christmas period by staying in a hotel, or families from overseas many have chosen to travel to the UK for a holiday, this year most will have opted to stay at home and save money ahead of what is expected to be a difficult 2009.

“Business travel always drops off in December, but this year it would have been further diminished as companies try to cut costs.

“Looking forward into 2009, the weak pound may help bring some tourists back to the UK and therefore into hotels, but on the whole, it will be a more testing year for hoteliers than the last few and they should be continuing to prepare themselves for a downturn in business.”

Preliminary data for December 2008

Rooms department	2008	2007	% change
UK Regional hotels (478)
Average daily room rate per occupied room	£71.42	£73.20	-2.4
Average daily room occupancy	56.3%	62.2%	-9.4
Average daily rooms yield per available room	£40.23	£45.53	-11.6
Approximate number of rooms per day	69,850	69,300
London hotels (150)
Average daily room rate per occupied room	£138.03	£139.33	-0.9
Average daily room occupancy	72.4%	73.2%	-1.2
Average daily rooms yield per available room	£99.89	£102.07	-2.1
Approximate number of rooms per day	34,050	34,200

– ends –

For further information or to speak to Robert, please contact: 

Jane Murray, PR Executive, 020 7065 0135, jane.murray@uk.pkf.com

Notes to Editors:

1. PKF (UK) LLP is a leading firm of accountants and business advisers with more than 1,800 partners and staff operating in 23 offices in the UK mainland firm, incorporating a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience public and not-for-profit sectors. Principal services includeassurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk.
   
2. PKF (UK) LLP is a member of PKF International Limited, an association of legally independent member firms with more than 14,650 people operating in 119 countries around the world.
   
3. PKF (UK) LLP has been providing hotel consultancy services since the early 1970s and, in that time, has undertaken thousands of assignments throughout Europe, the Middle East and Africa and further a field. Services include: market evaluation and financial feasibility studies; operational and profit improvement reviews; asset management; business valuations; international property services; corporate strategy and planning; litigation support. PKF’s web site features regular articles from the firm’s hotel consultancy services experts on industry topics – the address is www.pkf.co.uk/hotelcons.
   
4. PKF (UK) LLP’s hotel trends surveys feature a broad range of hotels across the country although mainly in the 3 – 4 star categories and featuring rather more chain operated hotels than those operated independently. While there are a fair number of hotels in country and rural areas, there is a predominance of hotels in towns and cities. In London, supply featured is mainly in the 3 –5 star categories.

Final data for November 2008

Rooms department	2008	2007	% change
UK Regional hotels	539	539
Average daily room rate per occupied room	£75.43	£77.23	-2.3
Average daily room occupancy	69.4%	73.7%	-6.0
Average daily rooms yield per available room	£52.32	£56.96	-8.2
Approximate number of rooms per day	74,000	73,450
London hotels	175	175
Average daily room rate per occupied room	£143.28	£149.87	-4.4
Average daily room occupancy	79.7%	85.1%	-6.3
Average daily rooms yield per available room	£114.24	£127.58	-10.5
Approximate number of rooms per day	37,450	37,850

Definition of the key terms used in the surveys table are given below:

Room occupancy: the ratio of total occupied rooms to total available rooms
Average achieved room rate (AARR): rooms revenue divided by the total number of guest rooms occupied during the year. 
Rooms yield: room occupancy multiplied by the average achieved room rate (also known as RevPar).