All eyes will be on London this summer as the Queen’s Diamond Jubilee and the London 2012 Games attract the world’s interest
New York, NY (PRWEB) March 11, 2012
Big4.com, the premier social networking forum for professionals and alumni of Accenture, Andersen, BearingPoint, Capgemini, Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers PwC reviewed a report by PricewaterhouseCoopers PwC which notes that highest annual occupancy in London is likely possible since the 1970s for the upcoming 2012 Summer Olympic Games.
PwC expects the Games to turn 2012 into a record year for London with 2.8% RevPAR growth. As well, record occupancies all round for 2012 are expected. With 2.8% RevPAR growth, hotels should see a positive impact on occupancy of almost 1.2% in London and 0.9% in the Regions taking occupancy to almost 84% in London and 72% outside the capital.
For the Regions, PwC expects only a small demand boost from the Games. Weymouth, the football cities and other centres holding events should see a small occupancy uplift and some areas will be hoping to benefit from the staycation trends as well as the Diamond Jubilee and Farnborough International Airshow. There could also be some overspill from London.
Looking ahead to 2013, lower demand and the east London supply spike look likely to depress trading in London. With no quick relief for squeezed consumer spending, a supply overhang and some difficult comparables in Q3, PwC anticipates a 3% occupancy fall to an average 81% in 2013. ADR also weakens by -3.4% which takes rates down to £130.80 – £5 less than we expect this year. And a RevPAR decrease of -6.7% takes RevPAR down to £106.16.
Budget rooms comprise almost half the total pipeline for even the Central zone. In the East it’s around 51% and in the West 41% of the 2012 pipeline. In the North and South budgets currently comprise 100% of all the [new] rooms.
Robert Milburn, hospitality and leisure leader at PwC remarks:
“All eyes will be on London this summer as the Queen’s Diamond Jubilee and the London 2012 Games attract the world’s interest. And without the boost to Q3 from the Games, London hotels would have been looking at a poor year with the impact of the harder trading environment being felt more keenly.”
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