PricewaterhouseCoopers (PWC) has almost doubled its estimates for the recovery in revenue per available room (revpar) that the hotel sector can expect in 2004.
In May PWC predicted that, following three years of falls, revpar would improve by 4.2% across the country this year. It expected London revpar to rise by 4.5% and provincial revpar by 4.1%.
Now it believes that revpar growth will be closer to 8% this year, led by an 8.7% rise in the provinces and an 8% increase in London.
Recovery over the next two years will continue to be led by regional hotels, which will see revpar rise by 10% in 2005 and 9.9% in 2006.
The report suggests that London revpar will not be too far behind, rising by 9% and 8.4% over each of the next two years.
But it warns that London’s real revpar rate, when adjusted for inflation, remains at less than £40, well below the 1997 peak of £58.
“London is busy again and rates are improving,” said Robert Milburn, UK leader for hospitality and leisure at PWC.
“The capital hasn’t seen more than three years of robust and unbroken revpar growth since 1994-1997.
“However, even by 2006 we expect London’s real revpar rate (stripped of CPI inflation) will still have some way to go to reach its 1997 peak, although the UK as a whole should manage to attain its 1990s peak by 2006.”
by Angela Frewin
Buy this week's Caterer magazine for more industry news and analysis
Featured video - for more, visit Caterer and Hotelkeeper’s YouTube channel >>