UK Hotels Still Struggling to Increase Profit

by William ASTON on October 30, 2009

Businesses in the travel and tourism industry are seeing times which are tougher than they have ever seen.  Britain is mired in one of the worst recessions it has ever known, as the economy has shrunk for the past five quarters making this the longest recession on record.  Because of this many people have chosen not to take holidays.  The swine flu outbreak has also slowed travel, as many think that it is simply too dangerous to take a holiday.  These factors have decimated hotels, which are seeing low occupancy rates, which have forced many to lower prices making the rooms less profitable.

A recent study by STR Global showed that although the downturn has started to slow, hotels are not yet in the clear of the global recession.  One measure that hotels use to gauge their success is revenue per available room.  According to the STR Global study revpar in Birmingham hotels went up half of a percentage point in the first week of October.  Although this is a modest gain, it is a good sign that the people are returning to their normal travel habits.  Occupancy rates when up nearly six percent from this time last year, however this gain was offset by the fact that many hotels have lowered their room rates to prices not seen since 2004.

Although numbers in Birmingham went up, the region at large was not so lucky.  The regional average revpar in the United Kingdom actually went down nearly eight percent while occupancy dropped about one and a half percent.

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