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Regional UK and London Hotels Record Positive RevPAR Growth for 2011

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According to data from STR Global, London and Regional U.K. reported positive RevPAR growth in 2011.

 Despite challenges throughout the year, demand grew in the majority of U.K. destinations, and for 2012, STR Global forecasts a slight RevPAR increase for London and Regional U.K.

"Overall 2011 has been a good year for U.K. hoteliers thanks to positive demand growth," said Elizabeth Randall, managing director at STR Global. "However, to reflect the uncertainty in the economy, our latest forecast for 2012 was downgraded, expecting RevPAR growth in London to reach 1.9% and 0.6% across Regional U.K.."

London saw RevPAR increase by 8.4% in 2011. Hotel performance showed that the events taking place in London and around the country, such as the royal wedding, the street protests and the riots in August had no significant impact on hotel performance. The royal wedding week in April 2011 saw actual RevPAR decline by 19.4%. Across all segments in the capital, RevPAR growth benefited from increasing average daily rate (ADR) between 5.7% (Midscale and Economy) and 10.4% (Upscale and Upper Midscale).

Regional U.K. RevPAR increased by 1.5% in 2011. In the regions, RevPAR growth resulted from improving occupancy, which increased modestly across all market classes, from 1.2% (Luxury and Upper Upscale) to 3.5% (Midscale and Economy). The Economy and Midscale class was the only segment in 2011 experiencing ADR decline (-2.1%).

Looking at regional cities, RevPAR growth was the result of a mixed growth between rate and occupancy. Amongst the best performers in 2011, Reading and Harrogate reported increases in occupancy, 7.6% and 6.0%, respectively, compared to the previous year. Oxford and Brighton, with ADR increases of 4.9% and 4.6%, respectively, were also the markets with the strongest ADR growth in the regions. Harrogate, with new supply growth in 2011 (+3.5%), gained from increased demand (+9.7%) supporting its RevPAR growth.

Across Regional U.K., the highest occupancy was achieved at Heathrow Airport (82.7%) followed by Edinburgh and York, both reaching 80.1%. In ADR terms, Bath, which reported the highest ADR in 2010, ended 2011 with the highest ADR in Regional U.K. at ?87.33. Preston and Hull, on the other hand, saw double-digit RevPAR declines. In Preston, the decline was led by additional supply (+10.0%) whereas Hull's RevPAR was led by a declining ADR of 9.0% to 44.84.

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