London Hotels, further evidence of a slowdown:
Background:
- Whitbread, STR etc. say the London market has deteriorated
- This is a supply, rather than a demand issue – see earlier Langton emails
- Other leisure operators are interested in the volume of hotel visitors
- Bed/night prices could soon be on the slide
More evidence:
- Latest HVS/AlixPartners Hotel Bulletin reports ‘the UK’s hotel market saw its first decline in average RevPAR…in 4yrs in Q1 2016’
- In the provinces, lower oil prices hit Aberdeen, but elsewhere hotels were stable
- HVS/AP says London REVPAR fell by 2% in 2016
- It points out that this was ‘their 5th consecutive quarter of flat or declining figures’
- Re London volumes, the Bulletin says ‘London remains a popular destination for Russian and Chinese visitors and investment continues to pour into the city’
- Buoys visitor numbers and good for other leisure operators. For hotel margins, not so much
Conclusion:
- Profit for London hoteliers could come unstuck.
- Oversupply is the issue; ‘twas forever thus
- The market here has no braking mechanism – it either stalls or crashes
- For other leisure operators, customer volumes should hold up
- Every cloud, and all that. If visitors pay less for their beds, they have more to spend elsewhere
- Operators such as MERL should be finding the current market relatively buoyant