London falling: hotel occupancy rates dip
21 December 2017Though average daily rates and supply are growing, occupancy rates have fallen across London hotels. Hotel Management International’s partners at STR Global go through the figures.
London hotels have had a mixed few months, with preliminary data gathered by STR Global showing a consistent decline in year-on-year (YOY) occupancy rates. Average daily rates (ADRs), however, have grown steadily.
YOY figures from September 2017 show that occupancy rates in the city dropped by 1.6% to 86.9%. October, meanwhile, saw occupancy rates decrease to levels not seen since 2006. This trend would continue into November, with occupancy rates falling again by 2.8% to 83.7%.
At the same time, ADRs have grown steadily across the capital. The October ADR grew by 2.3% year on year to £152.27, while the November figure jumped by 1.0% to £153.96. This trend has continued for over a year: November is the 13th month in a row with ADR growth in the capital. STR analysts attribute the decline in occupancy to a significant growth in supply – 4% in October and 3.3% in November – that outweighed a slight rise in demand.
This spike in demand is mainly down to the weakness of sterling, which makes London an appealing destination for foreign visitors. Uncertainty over Brexit also helps to keep the pound weak. London hoteliers will be hoping that 2018 sees a continued growth in demand to match the proliferation of new bedrooms.
