By Jack Mendel
British hotels cashed in last month during a scorching heatwave, but the industry fears its profits will freeze up as the UK prepares for bleak economic times.
Holiday destinations across the country had a record-breaking summer with a new survey showing more than 77 per cent occupancy in July compared to 73 in June.
This is however trailing behind pre-pandemic levels of 86 per cent, with the worrying economic outlook set to push the industry back further.
This comes as amid a rise in the energy price cap by more than 80 per cent, with many Brits have deciding to cut back and start saving, with a view to surviving the winter.
Research RSM Hotels Tracker, produced by Hotstats, also showed many hoteliers capitalised on rising demand, charging premium prices last month.
The average daily rates of occupancy however rose to £267.73 in the capital and almost £166 across the UK, up from £209.92 and £138 respectively from 2019.
Hotel-owners cashed in on revenue per available room up, up by £12 from pre-pandemic levels, and double that in London, representing gross operating profits of almost 45 per cent.
“Many will be capitalising on high room rates in a bid to make up for anticipated losses during the quieter autumn and winter months”, said Chris Tate, head of hotels and accommodation at RSM UK.
“There are concerns it might not be enough to see them through the tough trading period when demand falls after the buoyant summer season
‘It feels like the calm before the storm”, he added, saying the impending economic gloom will “undoubtably erode hotel revenues and profit margins. Hoteliers will find it difficult to attract customers if they continue charging the high room rates they’ve been enjoying in the peak season.”
He sad industries which rely on tourism could face “closing their doors during quieter periods”.
Thomas Pugh, economist at RSM UK, said ‘the outlook for consumer spending in general is bleak.
“As energy bills suck up more of consumers’ income it will inevitably leave significantly less to be spent on discretionary goods and services, such as hotel stays.”
The post British hotels cashed in on scorching summer but face gloomy winter freeze appeared first on CityAM.
