UK Hotels Forecast 2010 and 2011: On the Comeback Trail

Hotels are on the comeback trail. More accurately hotels appear to be on two separate trails to recovery – a super-highway for London and a much rougher Provincial trail. London stormed home in Q4 2009 and, unless it was just end of year exuberance, should manage to keep the pace up through 2010, strengthening further in 2011. We accept visibility is limited and the risks high, including a public sector squeeze. But reports of higher levels of transient travellers, more group conference bookings and an incipient – if slow – return of business travellers are all positive; especially for the capital, where we forecast 5.8% RevPAR growth in 2010 and a further 7.8% growth in 2011. It is likely to be a more difficult journey for the Provinces, where the challenging economic environment and a reliance on dwindling domestic business, supports prospects of a much more gentle comeback in hotel fortunes. We forecast 1.6% RevPAR growth in the Provinces in 2010 and a further 3.1% in 2011.

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