London RevPAR Falling Down

Dwindling corporate travel and falling hotel rates this year have contributed to a double-digit percentage drop in revenue per available room in both London and the United Kingdom as a whole, according to data released this week by TRI Hospitality Consulting.

RevPAR was down 12 percent in London for the first two months of 2009, compared with the same period of 2008, according to TRI's survey. The average rate for those two months was down 7.3 percent, and occupancy dropped by 4.3 percent.

"Targeted discounts stimulated leisure demand, which, all things considered, kept occupancy levels reasonably high," TRI Hospitality Consulting managing director Jonathan Langston said in a statement. "This was not enough to compensate for the continuing loss of high-paying corporate guests, which combined with discounted rates, meant no interruption to the negative trend."

The picture is similar for the entire United Kingdom. RevPAR dropped 12.6 percent by the end of February, while occupancy was down 4.3 percent the average rate was down 6.6 percent, TRI reported.

The report also noted that traffic to seven United Kingdom airports, including Heathrow and Gatwick, was down 12.5 percent for February 2009 compared with February 2008. More than half of the drop, however, can be attributed to both severe weather at the beginning of the month and the loss of the leap-year day that was included in February 2008, according to the report.