2025-01-03-莱坊-UK_Hotel_Dashboard_Q3_2024_8页_348kb

London Hotel Market Summary

Core Content Overview

This document provides a detailed analysis of the performance of the London hotel market and the broader Regional UK hotel sector in Q3-2024 and the nine-month period to September YTD. It includes key performance indicators (KPIs), cost trends, revenue growth, and investment data, highlighting the recovery from the pandemic and the impact of external factors such as hybrid working and cost of living.

Key Performance Indicators (KPIs) - London

• Occupancy in Q3-2024 reached 87.2%, the highest since Q3-2018, and is on track to match or exceed the 2019 full-year level of 82%.
• The luxury and upper-upscale segments drove this growth, achieving over 5 percentage point increases in occupancy.
• ADR remained flat in Q3 but declined by 4% in the luxury segment and 3% in the midscale and select-service segments.
• RevPAR growth was positive overall, though select-service hotels remained on par with 2023 levels.
• TRevPAR increased by 3.8% in Q3 and 4.6% YTD, showing the importance of ancillary revenues.
• GOPPAR rose by 7.3% in Q3 and 6.6% YTD, with a GOP margin of 47% in Q3 and 42% YTD, slightly below pre-pandemic levels.

Regional UK Hotel Market Summary

• Occupancy in the Regional UK market reached 82% in Q3, up from previous quarters, but still 2 percentage points below 2019 levels.
• Golf & Spa hotels outperformed the market, with a 7 percentage point increase in occupancy to 79%.
• ADR growth in Q3 was weaker than Q2, at 1.8% compared to 4.5%.
• RevPAR growth was stronger in certain segments, with Golf & Spa hotels seeing a 12.6% increase and upscale hotels 5.5%.
• F&B revenue grew by 2.6% PAR in Q3, but F&B costs increased faster than revenue, leading to a decline in F&B profit margins.
• GOPPAR growth slowed in Q3 compared to the previous quarter, increasing by 5% versus 7.9% YTD.

Cost Trends

• Departmental costs fell by 1% PAR in Q3 due to falling inflation and improved efficiencies, but remained 1.4% higher on a PAR basis as at September YTD.
• Total undistributed expenses increased by 3% YTD, driven by rising costs in non-utility areas.
• Utility costs fell by 13% YTD, providing a counterbalance to other rising costs.

Ancillary Revenue Growth

• Ancillary revenues (excluding F&B) saw strong growth, up 11% PAR in Q3, contributing significantly to TRevPAR growth.
• Golf & Spa hotels had the highest ancillary revenue contribution, with 27% of total revenue from ancillary sources.
• Ancillary revenue growth was 12% PAR in Q3, with costs rising at a slower pace (9% PAR), leading to a 17% PAR increase in ancillary income.

Investment Activity

• UK hotel investment volumes reached £4.5 billion in the nine-month period to September YTD, involving 265 hotels and 28,300 rooms.
• London accounted for 57% of the market share, with a focus on upscale, upper-upscale, and luxury hotels.
• Average price per key in London increased by 32% to £392,000, while in Regional UK it decreased by 3% to £123,000.
• Investment flows were directed towards North America, East Asia, Europe, and Other, with the average transaction price per room by capital flow detailed in the chart.

Key Insights

• The London market is recovering to pre-pandemic occupancy levels, driven by luxury and upper-upscale segments.
• Hybrid working and cost of living remain challenges for midscale and luxury hotels.
• TRevPAR growth is fueled by ancillary revenues, particularly in Golf & Spa hotels.
• F&B costs are rising faster than revenue, affecting profit margins.
• GOPPAR growth is positive but slowing, with Golf & Spa hotels leading in profitability.
• Investment activity in the UK hotel sector is concentrated in London, with a focus on high-end properties.

Glossary

• POR – Per occupied room
• PAR – Per available room
• RevPAR – Rooms revenue per available room
• TRevPAR – Total revenue per available room
• GOPPAR – Gross operating profit per available room
• F&B – Food and Beverage

Contact Information

For further details on hotel research and investment opportunities, contact:

• Shaun Roy – Partner, Head of Hotels
  Email: Shaun.roy@knightfrank.com
  Phone: +44 7957 342 285

• Henry Jackson – Partner, Head of Hotel Agency
  Email: Henry.jackson@knightfrank.com
  Phone: +44 7767 754 386

• Karen Callahan – Partner, Head of Hotel Valuations
  Email: Kren.callahan@knightfrank.com
  Phone: +44 7825 276 334

• Philippa Goldstein – Senior Surveyor, Hotels
  Email: Philippa.goldstein@knightfrank.com
  Phone: +44 7970 230 801

Hotel research reports are available at: knightfrank.com/research/
Category: Property > Sector > Hotels