UK Hotel revenue has fallen for the first time in seven years; A survey of hotel industry revenue levels reports that the UK’s RevPAR (revenue per available room) has fallen for the first time in seven years. According to the HotelMarket Tracker from HVS London, regional hotels are struggling to maintain their average room rate, with a decline of 2.8% in revenue.
London hotels, however, are still going strong and have reported an increase in RevPAR of 3.6%. But experts say this rise has only been achieved because the Six Nations rugby tournament in the first quarter of 2019 resulted in a rise in hotel room demands and rates. But outside London, an over-supply of rooms has resulted in many venues offering more aggressive discounts to court guests.
The increase in discounts and commission charges from OTAs means the hospitality industry in regional areas of the UK, had had its worst RevPAR score for almost a decade.
Chairman of HVS, Russell Kent, said of the impact; ‘London’s performance in the early months of 2019 was helped by the Six Nations rugby tournament and Passenger Terminal Expo at ExCel. Conversely outside London hotel performance was adversely affected by supply growth causing hotels to discount more aggressively in many locations.
He added: ‘Ultimately this new supply should be absorbed but the effects of Brexit are also to blame for this.’
Increasing your RevPAR
Indeed, reports are not looking good for the nation’s regional hotels, which are now on average, charging just £64.95 for a room night.
However, there are ways and means of counteracting against this loss of room night revenue. The CMA is currently investigating the UK’s top-selling OTA booking engines and restricting them regarding high commission charges to hotels.
Roomolo offers the hospitality industry the only zero-commission booking engine system currently available. If hotels can reduce their reliance on Online Travel Agency booking engines, their revenue will almost certainly increase.
Improving your marketing strategies can help lead to a dramatic increase in room rate revenue too. Simple changes, like boosting the SEO on your hotel’s website, initiating guest loyalty programmes and using social media to your advantage, can all help boost individual businesses.
OTA advertising monopolies
Currently, Online Travel Agencies have search engine monopolies over individual hotels. This leads to OTA’s grabbing sales and earning commissions from hotel properties because guests often fail to book through the hotel’s own website directly.
With Brexit causing a market slowdown in some areas of the country, Kett explained: ‘London will always be a popular destination for both business and leisure hotels, but the ever-growing supply of rooms will mean that RevPAR growth will be more limited going forward as hotels vie to remain competitive and as the uncertainty over Brexit remains unresolved.’
The future for the UK’s regional hotels may well fall into a financial crisis if the current trend continues. Therefore, looking for a way to break the current deadlock online travel agencies have over the industry, would help reinforce positive financial changes.