Airport hotels are suffering serious declines in revenue as passenger numbers fall at UK airports, according to figures from Deloitte.
Hotels at Gatwick and Heathrow Airports are down 23.5% and 21.9% in revPAR respectively. BAA reported a 10.1% drop in passengers at UK airports during the first quarter with one of the most dramatic falls at Gatwick – down 14.6%.
The situation was made worse by the surge in new hotel supply associated with the opening of Terminal 5, said Deloitte. Several new budget hotels have opened recently in addition to the 605-room Sofitel London Heathrow.
As a whole, the UK hotel industry experienced a sharp decline in the first quarter of 2009. UK cities overall experienced a decline in revenue per available room (revPAR) by an average of £5 (9%).
Hotels in London brought up the UK average slightly with a revPAR decline of 8.1%, falling just over £7 to £82. A 4.8% drop in occupancy was the main culprit while average room rates were not far behind – down 3.5% to £113. Meanwhile, revPAR drops were more extreme across regional UK, down 10.3% to £41.
Deloitte hospitality managing partner Marvin Rust said: “The weak pound is one factor helping London hotels perform better than other UK destinations. For those who earn US dollars or Euros, London is less expensive than it has been for a number of years, and therefore tourists are keen to take advantage of this and are helping to fill London hotels.”
The year will continue to be tough for hoteliers, despite the boost in inbound tourism, he added.
“We are still looking at considerable revPAR declines for both regional UK and London for the rest of the year,” said Rust.