UK regional hotels outshine London rivals, says report

Despite continued concerns that the UK’s tourism industry is too reliant on London, 2014 saw regional hotels outperform their counterparts in the capital for the first time in 14 years, according to a report released today (15 April).

Hotel Britain 2015 – compiled by business advisory and accountancy firm BDO based on data from 656 hotels – found that UK hotels outside of London returned strong figures across the board.

Average occupancy for the regions was up 2.3 per cent to 75.1 per cent for the year – the highest occupancy since the compilation of Hotel Britain statistics began in 2004. Average room rate for the regions was up 7.7 per cent on 2013 to £60.71 – pushing rooms yield up by 10.2 per cent to £45.60.

The regional success story continued with a rooms yield compound annual growth rate (CAGR) of 3.9 per cent for 2010-2014, overtaking London for the first time since 2001-05.

Set against the backdrop of 4 per cent increase in supply, London hotels still maintained a very respectable 82.6 per cent average occupancy rate for the year. They also enjoyed a 0.9 per cent increase in average room rate to £148.42 – surpassing the 2008 peak of £137.47. As a result, rooms yield grew by 0.7 per cent to £122.61.

Reflecting the strong figures, transactional activity in the hotel sector also increased to £6.1bn – up 13 per cent on 2013 and the highest figure since 2006.

“The UK hotel sector has had a phenomenal year. Regional hotels have outperformed their London counterparts for the first time in 14 years, proving that the economic recovery is not just felt in the South East,” said Robert Barnard, partner at BDO.

“Hotels in London have also appeared to have recovered their pre-recession performance with strong occupancy, despite an increase in supply. All in all it’s clear that hotels across the UK have begun 2015 on a strong foundation.”