North West Chain Hotels Market Review – October 2009

No signs of a definite recovery yet

Another month goes by and the mixed signals in hotel performance continue for hoteliers in the North West, according to the latest data from HotStats, the UK’s foremost hotel performance benchmark database, by TRI Hospitality Consulting. Although hoteliers are still finding it hard to make any head way with average room rates, still down on October 2008 at £69.79, average room occupancy across the region was up 0.4 percentage points to 77.1% compared to October 2008. Total revenue per available room (TRevPAR) for October across all hotels was £108.79 at an average gross operating profit conversion at 36.8% of total revenue. 

Further analysis of the performance of various North West regional markets indicates that an increase in leisure-related demand is driving the small increases in average room occupancy.  In October 2009, leisure-related demand accounted for approximately 35% of total demand at hotels in the North West region, compared to 29% in October 2008.  The conference market has seen the biggest reduction in average sector room rates, down to £77.93 in October 2009 from £91.21 in October 2008. This is not surprising given the overall downturn in corporate conference spends and training/event budgets in the last year.  

Cumbria and Lancashire are leading the pack in terms of regional performance with both hotel markets exhibiting an increase in RevPAR.  More specifically, the Lake District and Blackpool hotel markets continue to perform well, with October 2009 YTD RevPAR, TrevPAR and gross operating profit all up on 2008 performance. 

Charles Scudamore, Director at TRI Hospitality Consulting commented “The region’s hoteliers are now well used to the difficult trading conditions and many have had to develop new strategies in order to generate business and increase their profile relative to the competition. It continues to be tough – particularly in markets where average room rate has been sacrificed significantly in order to maintain average room occupancy. In city locations and for hotels dependent on conference and contracted business/corporate demand the speed of the recovery will be slow although there are signs that 2010 will be a stronger year than 2009. In a lot of ways, the sooner we see the end of 2009, and get going again in 2010, the better.”

TRI Hospitality Consulting collects monthly profit and loss data for more than 9,000 branded full-service hotel bedrooms across the North West region, including samples for Cheshire, Cumbria, Greater Manchester, Merseyside and Lancashire.  The analysis for this hotel market report is exclusively from full-service hotels and is provided for the my-hospitality market review.

In addition TRI collects performance data for some 11,000 branded budget hotel rooms across the region. HotStats is the most detailed monthly hotel profit and loss performance database in the UK.