London's hotels enjoyed a major boost in profitability in August thanks to the Olympic Games, a new report from Savills has said. Gross operating profit per room soared by 90 per cent during the month in comparison to the same period in 2011, with revenue per available room (RevPAR) surging by 41 per cent in the same period.
The high demand from visitors for rooms during the showpiece sporting event was the obvious cause, but the figures still provided good reading for those investing in property in the London hotels sector, not least those who centred their attention on the West End luxury market.
According to the study, operating profit per room in five-star and West End hotels increased by 171 per cent from the August 2011 level, while RevPAR was up 64 per cent in five-star establishments and 65 per cent in the West End. The overall performance was described as "phenomenal" by head of hotel transactions at Savills Robert Seabrook.
He added: "The hosting of such a fantastic Olympic event can only enhance London's reputation as a world-class destination. However, looking to the immediate future, revenue and profit growth in the London full-service hotel market is slowing and, with the exception of the August Olympic period, is virtually flat."
While the luxury and central London hotel markets performed best, other parts of the capital also benefited from the Games. During August, the outer London and three-star market category still achieved a 30 per cent increase in operating profit per room from August 2011, suggesting that many visitors to the capital were happy to occupy available rooms that offered less luxury and longer journeys to events, but were still in the capital.
Although the centre of the action was the Olympic Park in the Stratford area to the east of central London, there were a number of events that took place partly or wholly in central London, such as the beach volleyball in Horseguard's Parade, archery at Lord's cricket ground and the triathlon and open water swimming events in Hyde Park.
- Friday 19 October 2012