High room rates see Olympic boost for hotels in London and the regions

Hotel yields in both London and the rest of the UK saw a rise in yields in August, seemingly boosted by the Olympic and Paralympic Games.

Preliminary figures from PKF Hotel Consultancy Services show that, across the country, a significant rise in room rates more than made up for a small drop in occupancy during August.

In the capital, hotels saw a 49.8 per cent year-on-year rise in room rate, from £110.22 in 2011 to £165.05 in August 2012, while occupancy, at 82 per cent, was 0.8 per cent down on last year.

This resulted in a 48.5 per cent increase in room yield for London hotels to £135.35, up from £91.12 in August 2011.

Elsewhere in the country, room rates rose by 5.7 per cent, from £59.22 to £62.61, while occupancy fell by 2.4 per cent to 75.6 per cent.

Rooms yield consequently improved by 3.2 per cent from £45.87 to £47.35.

Robert Barnard, partner for Hotel & Hospitality Consultancy Services at PKF, said the figures show that despite initial doubts and a slow July, the hospitality industry was eventually able to take advantage of the Olympics.

"In over 30 years in the industry, I can't recall ever seeing a year-on-year increase in rooms yield of almost 50 per cent so it's fair to say that it will have exceeded expectations," he said.

"Meanwhile, outside of the capital, there are indications that the continued popularity of 'staycations' has given hoteliers a much-needed fillip in an otherwise still stagnant market."

What long-term effects the Olympics will have on London's hotels remain to be seen, but Mr Barnard hopes they will be able to capitalise on the added exposure of the Games, which could lead to higher profits and an increase in London hotel recruitment.

"It will be interesting to see what legacy the Games leave for the UK hotel sector over the coming months," he commented.

"Previous host cities have reported a post-event hangover but London may yet prove to be more resilient as it has long since been considered a global destination in its own right and didn’t need the Olympics to put it on the map."

Berkeley Scott is a specialist agency providing hotel recruitment in London