The main indicators used to measure performance in the hotel industry are occupancy rates (of rooms or bed-places), average room rates (or ADR – average daily rate), and room yield, more commonly known as revenue per available room (RevPAR). The number of rooms and room supply are also of importance to developers looking to invest in new hotel properties. In the five years to 2019, hotel room occupancy was relatively stable in the UK, showing promising growth towards the end of the year. Achieved room rates also increased, resulting in higher revenue growth.
How does the London hotel market compare to regional cities?Although London remains an attractive location for hotel development in Europe, the regional market in the UK still holds potential for investors. Manchester, one of the biggest cities in the north of England, attracted a standout investment compared to other regional cities in 2019.
The difference in hotels in tourist-centric London and the more economical offerings across the rest of the UK are reflected in their KPIs; The average room rate stands at around 150 British pounds in London, compared to 70 outside of the city, resulting in less comparable revenue figures. Occupancy however is relatively consistent in both divisions of the market.