PHOTO: London's Oxford Street. (Photo courtesy Thinkstock)
Are business travelers and holiday makers turning their backs on London? A report in the Independent finds that hotel rooms and are standing empty as visitors are not turning up in the capital.
Many believed that in a post-Brexit world, travelers would be turning up in droves but, at least in London, that doesn’t appear to be the case.
“Sterling has fallen by more than 10 per cent against the euro and dollar since the vote in June to leave the EU, which should make the UK more attractive to foreign tourists – but bookings for London, the engine for UK tourism, have plummeted,” writes Simon Calder.
As rates at luxury hotels fall, so to are the occupancy rates in the city’s properties.
“The London-wide occupancy rate in October was 85 per cent, down from 89 per cent the year before. It is the lowest figure for the month since 2008, when the financial crisis began. The falls in October are the steepest for the month since 2001,” Calder reports.
It’s not just a weekend thing. The trend includes both business and leisure travelers.
“The main metric used by the hospitality industry for assessing performance is revenue per available room (RevPAR), which fell by 11.4 per cent last month compared with the previous year,” says Calder.
Meanwhile, outside of London, occupancy was down but rates were up.
“Outside London, occupancy fell slightly – down 1.4 per cent to 79.7 per cent – but was outweighed by a 1.9 per cent rise in average the rate to £72.16,” Calder notes.
While Brexit isn’t necessarily the only factor in a decline in RevPAR, Calder notes that while the UK was once the darling of the hotel industry when it came to expansion, the city has lost out to Amsterdam in recent months with hoteliers citing geopolitical instability as a leading concern.
“Nikola Reid, director of Deloitte’s Hospitality Advisory team, attributed London’s relative decline to ‘concerns around supply and uncertainty as to corporate sentiment,’” says Calder.
For more on Brexit and London’s hotel industry, read on here.