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Hotels
1. Cautious Optimism for 2018
London has remained a resilient market in 2017 and
security fears has not dampened the enthusiasm for
both, the corporate and leisure markets. The weak pound
undoubtedly has helped sustain the level of hotel
occupancy but London has been experiencing above
average supply growth.
Occupancy levels has been averaging just over 80% and it is predicted to continue into 2018 however a cautious
outlook must be maintained.
Globally, revenue per available room (RevPAR) grew 2.1 per cent but in London this increased to nine per cent.
The growth in RevPAR1 and GOPPAR2 will continue be amid predictions of labour shortages and increasing costs.
Solid income generated from the hotel sector is likely to drive increased investor appetite but considerable
challenges lies ahead and embracing innovation is going to be critical for businesses.
Major challenges in 2018
Increased operational costs
Political uncertainty arising from
Brexit
Security concerns
Labour shortages
Growth in serviced apartments
New hotel room openings running very
high
Minimise risk and maximise
staff/guest safety.
Operators must prepare for a hard Brexit
and the effects are likely to be severe. The EU recently announced that the European Medicines Agency will
relocate from London to Amsterdam when the UK leaves in 2019. The move will have a massive and devastating
impact on the London hotel market, leaving some 40,0003 empty hotel rooms a year and leave operators facing
some difficult decisions.
Hotels will need to adapt and innovate to drive continued growth and profitability, and thereby value
Gain competitive edge through WIFI analytics
Be part of the local community creating a sense of belonging, it must not be just a convenience of choosing
your Hotel
Embrace social wellness trend
Utilise social media to engage with guests and it should be an essential part of a hotel’s business
Dedicate resources behind the highest opportunity markets a
strengthening brand portfolio
For further information contact:
Yusuf Pandor MRICS
yusuf@pandorconsulting.com
07800 559 681
1 Rooms revenue divided by total number of available rooms
2 Total gross operating profit across all revenue streams divided by total available rooms during the period
3 According to law firm Royds Withy King.
pandorCONSULTING
Hospitality
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London Hotel Occupancy 2017
OCCUPANCY REVPAR
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