Hotel prices in the UK are set to rise in 2015 due to the recovery in the British economy and the hosting of major events such as the Rugby World Cup.

Business adviser Price Waterhouse Coopers (PWC) is predicting that average daily rates (ADR) in London are set to rise by 3.6 per cent this year to more than £145 as room occupancy is forecast to increase by 1.5 percentage points to reach 84% in the UK capital.

Outside London, PWC is predicting an overall 4.3 per cent year-on-year rise in ADR to £65 in the UK regions during 2015, with occupancy likely to improve by 1.6 points to 76 per cent across the country.

These rates are likely to be boosted by the Rugby World Cup, which is being held across England from September 18 to October 31, although many of the games will be held at weekends.

Regional hotels enjoyed a strong year in 2014 with average rates rising by 6.6 per cent up to September, with cities such as Glasgow, Bristol, Cardiff, Liverpool and York all seeing double-digit growth in revenue per room. Although PWC added that ADR for the UK regions is still around 20% lower than in 2007.

Liz Hall, PWC’s head of hospitality and leisure research, said: “The pendulum is swinging from buyers to a sellers’ market where hotels have more power to dictate prices and policies with some hotels reportedly trying to negotiate double-digit increases. Add-on extras like cancellation charges are becoming more common.

“The UK economic recovery is gathering pace and should bring good news for London and regional hotels as travel and consumer confidence pick up. However, the hotel sector does face ongoing geopolitical uncertainty, both in the UK and further afield, as well as other challenges.”

PWC added that the conference and meetings market “remains unsettled” with the sector “far from fully recovered”.

“Demand remains polarised and price aware, with residential meetings under buyer scrutiny. However, there are some signs of more relaxed corporate travel budgets and more training spend for some sectors,” said PWC in its report.

 

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