Today’s news in brief – 17/10/23
The UK’s luxury hotel market has been driving the hotel industry’s recovery, with record room rates and revenue per available room (RevPAR) increasing, according to RSM’s Hotels Tracker. While occupancy levels still lag behind pre-pandemic levels, many consumers are opting for budget hotels, squeezing middle-market options. In July, luxury hotel room rates reached a record £400.18, compared to middle-market rates at £149.76 and budget hotels at £108.70. This gap has widened, with luxury hotel prices 268% higher than budget hotels in July 2023, compared to the pre-pandemic peak season at 244%. Gross operating profits (GOP) in luxury hotels also outperformed, with GOP per available room at £186.32 in July. Despite a decline in August, luxury hotel GOP remains higher than middle-market and budget hotels. However, middle-market hotels are under pressure as people are trading down to budget options due to the cost of living.
Meanwhile, the Leonardo Hotel in Newcastle is up for sale for over £31.8m. The 274-bedroom hotel is currently leased to Leonardo Hotel Management and is expected to yield around 8.5% this year, rising to 11.05% in 2033. Newcastle’s hotel market has been performing well, with revenue per available room over 15% higher than in 2019, making it an attractive proposition for budget-friendly stays.
Whitbread has opened the Premier Inn Swindon Town Centre, a new-generation hotel operating with 100% renewable energy. The hotel incorporates various sustainable features, including energy-efficient heating, LED lighting, and solar photovoltaic panels. This aligns with Whitbread’s goal to remove mains gas connections from its estate by 2040. The hotel is shortlisted for Edie’s Net Zero Awards and will contribute to Whitbread’s net-zero commitments.
In Birmingham, Switch Hospitality Management Ltd, an asset management company, reported strong post-pandemic results, with its flagship hotel, Park Regis Birmingham, exceeding pre-pandemic performance. The West Midlands’ hotel sector is recording 78% of 2019 sales on average, while conference and meeting bookings at Park Regis are performing exceptionally well, with growth in smaller, more frequent events. Direct reservations at Park Regis have increased, and average day rates (ADR) have risen by 11%, reflecting the quality of the hotel’s services. The wider business events sector in the West Midlands is bouncing back faster than the UK average, hosting 78% of pre-pandemic meetings and conferences, according to a report by the West Midlands Growth Company.
