Sharp decline in London hotel revenues predicted

London hotels are likely to see a drop in revenue per available room of as much as 23 per cent this year, according to a new study.

With a drop of 1.8 per cent in the GDP forecast for 2009, the prediction made by the PricewaterhouseCoopers (PwC) hospitality & leisure team is for a decrease of approximately 10 per cent in average room revenues for hotels across the UK, with London hit the hardest at 23 per cent, largely due to lower room rates.

The drop in the provinces is expected to be significantly smaller than the in the capital, at 3.4 per cent, according to the PwC study.

In London, although the impact of curtained travel in the business sector is more severe, the increase in incoming eurozone tourists may help soften the short-term impact.

The head of research for hospitality and leisure at PwC, Liz Hall, said:

“Falling consumer spend and investment, combined with the prolonged financial market crisis will restrict economic growth over the next 12 months. We now expect GDP to contract by two per cent in 2009, following an estimated 0.9 per cent growth last year.”

She went on to say: “This harsher environment means hospitality and travel budgets are under even more pressure as firms tighten up on cost control. Although visibility is restricted, evidence points to an unprecedentedly poor hotel outlook for the year.”

Thanks to www.travelmole.com for the above quotes, for more information on this article please visit their website.

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