Poor August Numbers Plague UK Hotels

by Ella FAIRCHILD on September 30, 2009

According to a recent report, the poor August profits reported by United Kingdom hotels was largely due to slashed room rates.  Occupancy rates also suffered in the month of August which also contributed to the declining profits.  The numbers were reported by PKF Hotel Consultancy Services and looked at hotels in London.  Although occupancy rates were slightly down from this time last year, the real losses came in the form of lower room rates which were significantly lower than August of 2008.

The travel and tourism industry has had a rough two-year stretch due to the global recession and swine flu outbreak, which have coupled to keep many from traveling abroad.  The hotel segment of the travel and tourism industry has felt the sting, as numbers around the globe are down.  This has led many hotels to come up with innovative and desperate actions in an attempt to save money any way possible.  Some hotels have slashed room rates, while others have cut services and staff.

While occupancy rates in UK hotels fell just over two percent from this time last year, room rates dropped almost eight percent, which put them back to prices similar to 2004.  The declining room rates led to an eleven percent drop in overall room yield, which is the amount of money a hotel can make per room per night.

The numbers were not surprising to most in the industry, who expected this kind of drop off after the global recession slowed the world’s economy.  Edinburgh was one bright spot in the numbers, as hotels in the city were actually able to increase occupancy rates.  However, due to a cut in prices, room yield still fell by over four percent.

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