PwC UK Hotels Forecast 2011 & 2012 September edition

 

PwC’s latest hotels forecast for 2011 and 2012 sees a bumper crop for London but leaner pickings in the provinces. The Olympics provide some uplift in 2012 - but what will the spectre of the UK economic outlook mean for hotels?

 

London

 

London hoteliers have so far successfully ridden out the global economic storm. The city has shown itself to be a truly high velocity gateway city and the engine driving the UK hotel sector  An excellent Q2 this year will help RevPAR end the year with a 8.1% gain.

 

In 2012 the Olympics, the Farnborough International Airshow and the Queen’s Diamond Jubilee should ensure a busy year for London’s hoteliers, mostly in Q3. Perhaps not quite as good as some expect though and we expect ADR gains for the year as a whole of between 0.8% and 5.7% with RevPAR increases of between 2.8% and 8.3% (PwC mid and high visitor scenarios).

 

The Provinces

 

Trading conditions remain tough in the provinces and prospects less promising. But it’s been a very mixed bag, with the Edinburgh Festival and Fringe reporting a successful year with visitor  numbers in the city centre up almost 9% on 2010.  We anticipate the regions continuing to make progress but as they struggle disproportionately with public sector cuts and job  losses they are likely to see a slower paced recovery than London. Overall we forecast 3% RevPAR growth for the rest of 2011.

 

2012 should be a better year and there should be some Olympic uplift. In 2012, the Olympics, the Farnborough International Air Show and the Jubilee will hopefully also help boost the tourism mood and hotel business too.

 

Supply: Olympics run-up puts east London firmly on the map

 

In the run-up to the Olympics, a large amount of additional supply is coming online in London bringing exciting new names and brands to the scene. In 2010 and 2011 over 5,000 new rooms opened or re-opened, For the remainder of 2011 and 2012 around 6,000 rooms are expected to open.