UK hotel sector gets pre-Christmas boost
UK hotel occupancy levels saw a year-on-year boost in November, helped by the start of the Christmas party season, according to the RSM Hotels Tracker.
The data, which is compiled and produced by Hotstats and analysed by RSM UK, shows occupancy of UK hotels was up from 76.6% to 79.1% in November year-on-year, while London also saw an increase from 79.6% to 82.8% in the same period.
Average daily rates (ADR) of occupied rooms in the UK rose from £143.71 to £148.46 in November year-on-year, and from £214.80 to £217.86 in London. Gross operating profits (GOP) of UK hotels increased from 35.2% to 36.6% in November year-on-year, and from 41.1% to 42.2% in London.
Demand for travel also looks set to continue in 2025, as RSM UK’s Consumer Outlook shows 28% of consumers are planning a long-stay holiday in the UK this year, up from 25% last year, and 33% are planning a weekend away in the UK.
Chris Tate, head of hotels and accommodation at leading audit, tax and consulting firm RSM UK, said: “Christmas came early for the UK hotel sector last year, with a year-on-year boost in occupancy levels. This was partly helped by the start of the festive season and an uptick in airport passenger numbers, suggesting international travel is back in full swing. It is clear holidays remain a priority for travellers, and this shows no signs of slowing down, with consumers continuing to plan trips in the UK and abroad in 2025.
“While room rates have mostly plateaued, hoteliers are currently combating this with improved occupancy rates. However, caution remains, particularly with a raft of cost increases following the Autumn Budget coming their way in April. The sector will need to think strategically about how to manage costs, this might include increasing the adoption of artificial intelligence to create efficiencies.”
Thomas Pugh, economist at RSM UK, added: “After the economy contracted in September and October, a boost to the hotel sector in November increases our hopes that the economy rebounded that month.
“Any evidence of increasing room rates is likely to worry the Bank of England, which is already grappling with a trade-off between rising inflation and weak economic growth, as strong inflation in the hospitality sector was a key reason for sticky inflation last year.
“Overall, there are reasons to expect hospitality spend to increase this year. In the UK, households’ real incomes are set to continue rising, while there are also signs that the amount consumers are saving has peaked. This should mean that consumer spending grows in 2025. What’s more, the US economy is set to continue to grow strongly, which combined with a strong US dollar, will make tourism more attractive.”
