Hotel prices in London are set to hit a low this year, after the record high prices seen in 2012 due to the Olympic and Paralympic Games.
A recent report by Pricewaterhouse Coopers (PwC) says that although the hotel industry has been very resilient in 2012, only four cities in Europe have reached a high RevPAR growth, St Petersburg (14.1 percent), Dublin (13.9 percent), Prague (13.1 percent) and Moscow (12.9 percent), with growth in Berlin (9.6 percent) and Paris (9.0 percent).
The report also suggesting that London’s hotel prices will fall by an estimated 2.7 percent in average daily rates (ADR), to £139.07 per room in 2013, from £142.95 per night in 2012. However, this will still be around 4.5 percent more than the hotel rates in London in 2011, which saw an ADR of £133.08 per room.
Robert Milburn, the hospitality and leisure analyst at the company, said, ‘A return to a steady state of economic growth is not likely in the short term and the hotel industry has to adapt to this ‘new normal’ as well as to new trends and challenges facing the sector. Our 2013 forecast depends largely on how the Euro zone crisis evolves. Whilst currently we expect steady growth in many cities, if the crisis escalates, we may see even less promising results for the hotel industry.
2013 may be largely about the economy, but it will also be about seizing the opportunities created by past investment, a clear strategy and skilful management.’
Liz Hall, the head of hospitality and leisure research at PwC, added, ’2013 will see St Petersburg, Moscow, Paris, Frankfurt, Berlin and Dublin clear winners in terms of RevPAR growth (in Euros). For others we expect little or no RevPAR growth and some, most notably London, will see negative growth. For London coming off an Olympic high, this is perhaps expected and the city will still enjoy very high absolute trading and profitability levels.’