London room rates set to drop by 23 per cent in 2009

Economic slowdown could cause overall drop of 9.4 per cent for the UK, Pricewaterhousecoopers predicts

London: room rates could drop by 23 per cent in 2009
London: room rates could drop by 23 per cent in 2009

London 2009 room rates look set to fall by almost a quarter as the economy weakens, according to Pricewaterhousecoopers.

The capital is likely to see a 23 per cent year-on-year drop in revenue per available room (Revpar) for 2009, the research revealed, as part of an overall decline of 9.4 per cent for the UK.

Pricewaterhousecoopers head of research for hospitality and leisure Liz Hall said: "We now expect GDP to contract by two per cent in 2009, following an estimated 0.9 per cent growth last year. This harsher environment means hospitality and travel budgets are under even more pressure as firms tighten up on cost control."

Expectations have further declined since an 11.9 per cent drop was predicted for the London hotel market in November.

Hall added: "With no clear signs as to when business travel demand might be re-awakened, what was our downside scenario now seems the most likely outcome for 2009 - meaning record Revpar falls in London this year. While more European companies may book here because of the relatively weak pound, many have economic problems at home too."

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