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Steep fall in hotel RevPAR expected
London hoteliers can expect to see a 12.7 per cent fall in RevPAR, to an average of £81.62, by the year-end 2009, according to consultancy Deloitte.
In its latest quarterly Hotel Market Outlook, Deloitte predicts that the decline in RevPAR will come as a of average occupancy falling 5.8 per cent to 75.2 per cent. Average room rates are also likely to take a hit and to settle at £108.38, a £9 drop on the previous year. All market segments are expected to see RevPAR decline more than 10 per cent during 2009, but luxury hotels are set to suffer the most with average room rates falling 18.2 per cent (more than a £35 reduction).
The outlook for 2010 looks similar to 2009, with little sign of the hoped recovery for hoteliers in the capital, with average room rates are due to fall a further £9 to £99.03. Regional hotels, on the other hand, are predicted to weather the downturn better than those in the capital, with RevPAR expected to settle at £43.63 for the year. The first half of 2010 should also see these hotels start to recover.
Deloitte said: "When occupancy starts to drop, it is important that hoteliers do not start cutting rates to fill rooms but become creative in attracting guests and offer incentives that will boost occupancy such as packages to include dinner or a spa treatment. "This will result in better financial health through the downturn, a faster recovery afterwards and will tap into the leisure markets and customers who continue to travel and are eagerly searching for value for money."
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