London Hotel Occupancy Flat Following Room Rate Crash

The recession-led crash in hotel rates may be coming to an end in London, according to latest figures from hospitality benchmarking company STR Global.

Room rates in the U.K. capital in the first six months of 2009 were 6.4 percent lower than the same period in 2008, but occupancy was down only 1 percent to 78 percent. In consequence, Marvin Rust, hospitality managing partner for STR Global part-owner Deloitte, has urged hotels to raise their prices for the second half of this year.

"Although strong occupancy has come partially as a result of a drop in average room rates, it is important to start pushing up average room rates now that occupancy is stabilizing," Rust said.

STR also reports good performances in other parts of the United Kingdom for the first six months of 2009. Occupancy in Glasgow was 72 percent, with room rates falling only 0.8 percent. However, the average room rate in Glasgow was only £64, which Rust said has helped boost its appeal as a bargain meetings and events destination. Average rate in London, in contrast, was almost double at £122.

Among the worst first-half performers in the United Kingdom were hotels at London airports Heathrow and Gatwick. Average rates have fallen by more than 10 percent at both so far this year.

Overall, however, said Rust, "hotels in both London and the regions have held up exceptionally well in the global economic downturn with revenue per available room down by only 11.1 percent, especially when compared to other countries across Europe, some of which are seeing RevPAR drop up to 40 percent."