London hotel occupancy rises despite room rate decline

Park Plaza London Waterloo, United Kingdom. Photo credit: Radisson Hotel Group

Hotels in London hotels recorded higher occupancy but lower rates, according to STR’s preliminary June 2018 data.

London hotels recorded strong rises in supply, demand and occupancy. Supply increased 1.9 percent while demand grew 4.1 percent. Occupancy followed with a 2.2-percent increase to 86.1 percent. 

However, ADR fell slightly behind year-over-year comparisons, dropping 0.6 percent to £160.84. Despite the decline in ADR, London's hotels still successfully recorded a 1.6-percent increase in RevPAR to £138.46.

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June was London’s first month with a YOY occupancy increase since May 2017. June also marked the fourth month in a row with an ADR decrease after 16 straight positive months in the metric.

Various concerts throughout the month, such as Katy Perry on June 14-15, Beyoncé and Jay-Z on June 15-16 June, Ed Sheeran on June 14-17 and the Foo Fighters on June 22-23, boosted market demand. Favorable weather conditions also contributed to the city's strong hotel performance growth.

June's results are a major contrast to those recorded in May at London hotels. London saw overall negative performance. The city's hotels not only saw the largest ADR decrease in the market at 3.7 for any May since 2009, but also a 4.5-percent drop in RevPAR. STR pointed to supply growth as the cause London's lower performance. Hotel supply grew 2.0 percent early in the month, causing occupancy to drop 1.0 percent to 82.3 percent. This was the 12th consecutive month with a YOY occupancy decrease in the market. The Royal Wedding on May 19, 2018 was no help for performance. London hotels saw no significant increase in demand, which grew only 0.9 percent. 

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