London hotel performance breaks records in July

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Ibis London Blackfriars, UK. Photo credit: AccorHotels Group

London hotels achieved record-breaking levels in ADR and RevPAR in July, according to preliminary data from STR.

Calculated as the highest levels for any month in the city, ADR grew 4.7 percent to £171.25 while RevPAR increased 9 percent to £156.15.

Supply grew 2 percent as demand grew 6.1 percent. Meanwhile, occupancy grew 4 percent to 91.2 percent in July compared to the same period last year. 

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Hotel performance for July surpassed the levels achieved in July 2012 when the market hosted the opening days of the Summer Olympic Games. A very warm summer along with popular events, including Wimbledon and London Pride, drove strong performance results, according to the data. It was noted hotel operators increased rates to capitalize on the uptick in business.

The numbers are in contrast to how the market has been performing. Hotels in London have been experiencing a slowdown in performance since record-breaking growth in first-half 2017. However, July's performance followed a 1.5-percent increase in RevPAR in June, indicating a hotel performance increase for this summer.

London's hotels saw growth in all metrics in June, except for ADR, which dropped 0.6 percent to £160.84. This was the fourth consecutive month with a decrease in ADR, following 16 consecutive months of increases. However, June marked the city’s first month with year-over-year occupancy growth since May 2017, increasing 2.2 percent to 86.1 percent. 

STR analysts attribute the 4.1-percent demand increase to various concerts throughout June, including Katy Perry from June 14 to 15, Beyoncé and Jay-Z from June 15 to 16, Ed Sheeran from June 14 to 17 and the Foo Fighters from June 22 to 23. Favorable weather conditions also boosted demand, the data indicated.