Hotel room rates drop – slightly!

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Leisure travellers are spending less on food and drink in hotels

Whilst hoteliers may be concerned about declining rates for rooms, we holidaymakers and travellers should be grateful that a pause has occurred in the price of room rates. I say “pause” because the decline in the UK in May is only 0.9% overall according to HotStats, which provides a monthly monitoring of hotel rates and profitability.

This is the second time in about eighteen months that there hasn’t been an overall increase. Why should that be so? Are we tightening our belts? Are fewer overseas visitors staying in hotels preferring Airbnb type accommodation? Are we trading down form four star to two or three?

What HotStats did point out was that with two bank holidays in May, leisure travellers – as opposed to business travellers – might have taken advantage to bot some extra days onto their bank holiday Mondays. That meant that there was less business travel and they are the people who traditionally pay higher rates. Leisure travers tend to be more cautious spending their money so this 0.9% drop may not last and taking one month and finding a pattern is dangerous.

Whatever the reason for the decline –and HotStats doesn’t suggest an answer – we should be pleased even if hoteliers aren’t. It also appeared that in may we spent less than the month before on food and drink in hotels and the number of rooms that we booked year-on-year dropped slightly making occupancy rates only about 80.5%. Again that could be due to more business travel. Nonetheless, the average rate was £115.90.

It could mean that in July and August when there are even fewer business travellers there may be  another drop in hotels – or at least those in the big cities.

Just how a month can change things can be shown by looking at Leeds. During May, the Tour de Yorkshire took place with its final stages in the city. Room occupancy at hotels in Leeds rose by 6.5percentage point (not per cent) year-on-year, to 79.1% which was accompanied by a 1.5% increase in achieved average room rate, to £80.59.

It shows, once again, that hoteliers do take advantage of large events in their area not to discount prices in order to attract business. Some certainly raise prices. The lesson is try to holiday in a city or big town when there are fewer headline events and go to see the attractions that are there throughout the year.

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