London Hoteliers Report Largest Decline Since 2001
London hoteliers have reported significant declines across all performance metrics in October, as uncertainty driven by Brexit begins to impact the sector.
According to STR’s October 2016 preliminary performance data for London, the city’s hotels experienced a 4% occupancy decrease to 85%, a 7.7% ADR decrease to £149.72 ($185.91 USD) and a 11.4% RevPAR decrease to £127.23 ($157.98 USD).
The absolute occupancy level was the lowest for an October in London since 2008. The year-over-year percentage changes also marked London’s largest October declines for occupancy and ADR since 2001.
At that time, the decline in performance was attributed to the impact of the September 11 terror attacks in the United States on international travel and tourism.
Based on daily data from October, London reported the following in year-over-year comparisons:
- an increase in supply (+2.9%) and a decrease in demand (-1.2%);
- a 4.0% decrease in occupancy to 85.0%;
- a 7.7% decrease in average daily rate (ADR) to GBP149.72 ($185.91 USD); and
- an 11.4% decrease in revenue per available room (RevPAR) to GBP127.23 ($157.98 USD).
STR analysts noted that steady supply growth continued in the market, while demand dropped across both weekday and weekend business.
As a result, the market failed to recapture the high performance levels seen around this time last year with the Rugby World Cup.