London hotels enjoy pre-Olympics boost

London hotels enjoy pre-Olympics boost

London hotels have enjoyed an Olympic boost despite concerns about a potential post-Olympic hangover.

Analyst PwC reports a surge in luxury and budget hotel capacity in London since the city won its bid to host the Olympics seven years ago.

There has been an increase in average daily rate (ADR) and in revenue per available room (revPAR) over the period from 2005 to today, with the games due to start on Friday.

PwC forecasts the average daily rate over the Olympic year will be 13% up on 2005 at £135.40 a night, with prices adjusted for inflation. It forecasts a 29% increase in the average revenue per available room over the period.

Average occupancy will be up 13.5% since 2005, according to PwC, despite London hoteliers adding almost 4,000 luxury rooms and 9,700 budget rooms since the year of the bid.

PwC head of hospitality and leisure research Liz Hall said: “The luxury hotel market in London has grown 33% since the Games were announced and the budget sector has increased its presence with a 60% increase in room supply.”

She warned: “Such a large supply spike against an uncertain economic and travel environment is likely to mean a tougher competitive outlook.

“If there is a post-Games travel dip, trading could get very difficult.”

However, Hall said: “London has a highly profitable hotel sector. Most cities around the world would love to have even a fraction of its success.”


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