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Hotel profitability gap widens

Hotel profitability gap widens

A new study has found that the profitability of London hotels compared to those in the regions has increased since 2000.

The research by STR Global and Whitebridge Hospitality also revealed that hotels in the capital have seen an annual growth rate of minus 0.2%, but have still reported a real gross operating profit that kept up with inflation levels over the last eleven years.

Researchers analysed two samples of hotels with a total of more than 31,000 rooms and found that profit margins for hotel owners in London last year were back at the 2000 level.

In comparison, regional hotels have seen their annual growth rate for real gross operating profit fall to 6.7% since 2000, and their profit margins drop by 11.6 percentage points to 31.3%.

Commenting on the findings, STR Global managing director Elizabeth Randall said they "highlighted the tougher market conditions for regional UK hotels".

Copyright Press Association 2011

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