LONDON HOTELS have posted records profits in September putting them comfortably in line for the best year ever says a new report published today.

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The boost – a 10.4% increase in profit per room – follows a one-off blip in August which was put down at the time to poor weather and the fallout from the London riots. London hotels are currently 8.4% ahead on profits posted in the first nine months of the year, compared to 2010, with to-date profit rising to £69.15 from £63.79.

The September figures in the UK Chain Hotels Market Review from industry researchers HotStats show the month was 24% above the year-to-date average at £85.64 which is 14% above the pre-recession high of £74.84, chalked up in September 2007.

Lehman Brothers

“Three years on from the collapse of Lehman Brothers, the increase in headline performance levels this month is further evidence, if it was needed, that hoteliers in the capital have put the memory of the crash in the hotel market in September 2008 firmly behind them,”
said Jonathan Langston, Managing Director of TRI Hospitality Consulting, publishers of the HotStats survey.

The principle driver of the cash boost was a 8.8% increase in Revenue per Available Room (RevPAR). In turn, this formidable RevPAR growth was “driven by a return to strong rate increases, which were primarily achieved in the corporate (+14.6% to £158.06) and residential-conference (+16% to £164.92), sectors” says the report.


“The growth in headline performance levels this month has clearly been driven by the commercial sector, echoing the recent European Cities Monitor by Cushman & Wakefield which states that London remains the best European city for business,” added Langston.

The only source of gloom for hoteliers in this month’s report was a drop in ancillary spending with meeting room revenue down 2% and food and beverage revenue down -2.2%.

The rosy picture from HotStats is backed up by another study from PKF Hotel Consultancy Services, whose September results were released today.

Their London figures for September showed a room rate increase of 12.5% from £118.56 in 2009 to £133.37 in 2010. Occupancy increased 4.7% from 85.0% to 89.1% while rooms yield increased by 17.8% to £118.80 from £100.89.


“September was a robust month for London hoteliers with many regional cities also posting positive results” said Robert Barnard, partner for Hotel Consultancy Services at PKF.

“The Chancellor’s Spending Review announced last week is likely to affect hoteliers moving forward, as businesses tighten their belts once again. The solid figures we have seen over the past few months are at least a good start point if there are to be further bumps in the road ahead for the UK’s hoteliers.”

While it is to be welcomed that London’s hotel sector appears to be emerging strongly from recession, the news of such large increases in profits fed by room rate increases, will fuel concern within the industry. Last month we reported that a leading travel expert claims “London is in danger of pricing itself out of the market“.

UK Chain Hotels Market Review (HotStats)
European Cities Monitor (Cushman & Wakefield)
Strong September for hoteliers across the UK
London hotels warned capital ‘is in danger of pricing itself out of the market’ (LondonNet)

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Photo ‘Hotel’ by aubergene used under Creative Commons License