STR Global, the leading provider of market data to the hotel industry, in conjunction with Tourism Economics, is forecasting positive supply and demand growth across London and regional U.K. in 2013.
Although the continuing economic uncertainty across Europe makes forecasting a challenging task and subject to change, supply in London is projected to increase by 3.5%, while demand will grow by 2.9%. The excess supply is forecast to lead to an occupancy decrease of -0.5% in 2013. Revenue per available room (RevPAR) is expected to decline by -1.6%, primarily driven by a decrease in average daily rate (ADR) of -1.1% to GBP139.13.
“RevPAR is predicted to increase in June and July, driven by a surge in occupancy from the return of the regular summer guests”, said Elizabeth Randall Winkle, managing director of STR Global. “However, this will be offset by a drastic decline in ADR the following month, resulting from the 2012 Olympic Games being hosted in London during August of last year.”
Upper Midscale positives
In London, across the hotel class segments, Upper Midscale hotels are the only segment to see an increase in occupancy and RevPAR. The 0.4% increase in RevPAR is because the Upper Midscale segment is the only segment where demand is forecast to outpace supply. It is also the only segment in which occupancy is expected to exceed 80%.
Range of monthly RevPAR forecasts throughout 2013
In 2013, supply across regional U.K. is forecasted to grow 1.4%, exceeding demand growth of 0.6% and leading to an occupancy decrease of -0.8%. The decline in occupancy will be moderated by a 1.7% increase in ADR, resulting in a 0.9% increase in RevPAR to £41.54.
Across the U.K., monthly RevPAR percentage changes from the previous year are projected to range between -7.4% and 8.9% in Birmingham, with percentage ranges in Edinburgh (-6.2% to +8.2%), Gatwick (-2.0% to +13.3%), Glasgow (-4.5% to +12.1%), Heathrow (-7.1% to +12.3%), Leeds (-2.5% to +9.5%) and Manchester (-7.0% to +9.4%) illustrating similar patterns.
About STR Global
STR Global, in conjunction with Tourism Economics, produces quarterly Market Forecast reports for 45 markets across Europe, the Middle East and Asia.
STR Global provides clients—including hotel operators, developers, financiers, analysts and suppliers to the hotel industry—access to hotel research with regular and custom reports covering Europe, Middle East, Africa, Asia Pacific and South America. STR Global provides a single source of global hotel data covering daily and monthly performance data, forecasts, annual profitability, pipeline and census information. STR Global is part of the STR family of companies and is proudly associated with STR, RRC Associates, STR Analytics, and HotelNewsNow.com.
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