Cost of staying in Belfast hotels grows at over five times the UK average

The cost of staying overnight in a hotel in Belfast has risen more than five times as much as the UK average since June 2017,  according to an assessment by PwC, rising to almost £80.

And the PwC Hotels Forecast 2019 suggests that competition in the local hotel sector is heating up with new openings leading to a fall in occupancy rates, but the reward being increased revenue for those who succeed to attract visitors.

In a performance league table of 22 UK cities, Belfast’s Average Daily Rates (ADR) increased by +5.5% compared with the UK average of +0.8%, making the rate the third fastest-growing of 22 UK cities.

In June 2017 the average cost of an overnight stay in Belfast was £75.67; it is now £79.80, making it the 4th most expensive city to stay in outside of London. Comparatively hotel rooms in Cardiff  average £72.90 while in Edinburgh hotels command £93.92 per night on average.

Turning to actual financial performance, the key Revenue per available room (RevPAR) benchmark for UK on average grew by +1%, to £67.63 whereas Belfast recorded + 4.6%, to £62.28 (from £59.56), making it the city with the 7th highest increase.  

Increased competition led to a 0.9% fall in occupancy rates in Belfast, with a boom in development in the city over the last twelve-months period seeing five new hotels opening and more than 1000 new rooms due to come online by the end of 2018.

However with occupancy at 78%, Belfast remains above the UK average of 75.2%.

The Forecast indicates that to the end of 2019, the regions are unlikely to experience any growth in occupancy, and puts this down to continued economic uncertainty, weak business travel demand and an increase in new rooms.

Commenting on the latest forecast, PwC Northern Ireland partner Martin Cowie said:

“The influx of high-quality rooms to the market have driven and continue to support improved RevPAR and ADR for the city. Though the full impact hasn’t been realised with Signature Living’s new hotels in Waring Street and Bedford Street due to open by the end of the year and the Crumlin Road courthouse which just received planning permission, demand continues to be driven by inbound tourism, domestic holidays and events.

“Hoteliers can look forward to the 148th Open being held in Portrush in July 2019 - the biggest sporting event ever to be held here, which will bring a surge of visitors. It’s expected this will be the first Open Championship to sell out.”

Liz Hall, head of hospitality and leisure research at PwC, said:

“2017 was a hard act to follow for hotel trading, in terms of growth and 2018 has been held back by uncertainty, slower economic growth, significant supply additions and reported stuttering business travel.

“For a sector heavily reliant on people to deliver its products and services, the shortfall in availability of EU nationals remains a concern for hotels and the weak pound has pushed up the costs of retaining staff and importing goods within the sector.

“Following a number of years of strong revenue growth when there was not the imperative to focus on costs, prudent operators and owners need to adopt a stringent approach to operating costs growth in 2019 to preserve profitability.”

 

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