According to the Q4 Hotel Confidence Monitor – UK Regions by HotStats, the state of the UK economy and the continuing financial turmoil in the Eurozone will be the most critical factors impacting hotel demand in 2013.
These two factors were prevalent concerns for 50.9% of general managers surveyed in London and 34.6% of provincial hoteliers. Other major concerns for hoteliers in the UK included the strength of sterling damaging domestic tourism levels and inbound visitors, and for 7.7% of London a post-Olympics slump was a real concern.
Mark Dickens, managing director of HotStats commented:
“Aside from the post-Olympic slump, going into 2013 the major influences on performance for UK hoteliers are expected to remain the same as in recent years, with the state of our economy and the lack of a resolution in the European crisis being the primary concerns.
“Additionally, the recovery in the strength of sterling poses a real threat to leisure demand levels at hotels throughout the UK, a sector which has been the saviour of demand for many Provincial markets throughout the recession.”
London and Provincial
75% of London and 73.9% of Provincial general managers think that their hotel’s RevPAR performance during 2013 will be the same as or better than 2012.
The expectations for 2014 appear to be more positive with more than 90% of the general managers in London expecting an improvement in RevPAR on 2012 performance; with 80.3% of Provincial hoteliers expecting a growth in 2014 against their performance in 2012.
Despite a positive sentiment over the next three months, the legacy impact of the Olympic Games is unsurprisingly expected to be more of a long term gain, echoed by 74.8% of Provincial hoteliers and 53.6% of London hoteliers expecting no impact on business from the Games in the next three months.
This is affecting this quarter’s gross operating profit (IBFC) expectations, which have decreased compared with Q3 2012 in all regions. For the next three months GOP growth expectations across the UK are mixed, with 53.6% of London general managers expecting an increase and 45.8% of Provincial hoteliers expecting a decrease in Q4 2012 against Q4 2011.
London RevPAR expectations for Q4 2012 are positive with 75% of general managers expecting an increase, a trend reflected in the latest August HotStats UK Chain Hotels Market Review. In the Provinces RevPAR expectations are also positive with 55.4% of general managers expecting an increase or no change for the next three months.
Overall, the UK general manager’s optimism for the next three months is positive, with 78.6% of London and 47.5% of Provincial general managers being more confident looking at the last quarter of 2012.