A sharp decline in leisure and corporate travel during the first quarter of 2009 resulted in a 9 per cent decline in RevPAR at UK hotels – a weaker than expected performance for the usually busy Easter period.

According to advisory firm Deloitte's latest report, RevPAR across regional UK hotels fell by 10.3 per cent to £41. The largest drops were at Gatwick and Heathrow Airports, down 23.5 per cent and 21.9 per cent respectively. BAA reported a 10.1 per cent drop in passengers at UK airports during the first quarter with one of the most dramatic falls at Gatwick – down 14.6 per cent. RevPAR at London hotels also fell by 8.1 per cent to £82 and average room rates dropped by 3.5 per cent to £113.

This decline has been attributed to fewer people traveling abroad, resulting in lower demand at airport hotels. Passenger numbers were also down 6.4 per cent at Heathrow accounting for some of the drop off in hotel performance. However, the situation was made worse by the surge in new hotel supply associated with the opening of Terminal 5 and the recent opening of several new budget hotels. Marvin Rust, hospitality managing partner at Deloitte, said: "The weak pound is one factor helping London hotels perform better than other UK destinations. For those who earn US dollars or Euros, London is less expensive than it has been for a number of years, and therefore tourists are keen to take advantage of this and are helping to fill London hotels."

"Reduced consumer and business spending stemming from the global economic downturn continues to challenge the hotel industry and this will be the story until at least the final quarter of 2009. "Cost cutting measures are now almost universal and 95 per cent of CFOs plan to cut, or have already cut, discretionary spending such as travel, hotels, entertainment and training. More Brits holidaying in the UK this summer and an increase in the number of American and European visitors taking advantage of the weak pound will soften the downturn for hoteliers to a degree. However we are still looking at considerable revPAR declines for both regional UK and London for the rest of the year.”