Sluggish economic growth and increased hotel supply to combat 2013 rate hikes, says BSI report

Continued slow growth in the economy, coupled with an increase in hotel supply in key locations will help to keep prices down next year, according to BSI's latest Corporate Benchmark Report.

BSI's Corporate Benchmark Report looks at hotel trends
BSI's Corporate Benchmark Report looks at hotel trends

The BSI Corporate Benchmark Report, published today (19 December), examines trends in the hotel and accommodation sectors in the UK and worldwide.

Research carried out by BSI shows that average room rates in London rose by just 1% year on year, when looking at the period January to August 2011, compared to the same time in 2012.

Meanwhile, average hotel rates at Heathrow were down 13% over that period, while in Birmingham rates dipped 6%.

Looking at industry sectors, rates paid by the media industry dropped by 32% year on year, while banking and finance rates were down 11%, and professional services down 17%.

However, rates rose for the retail sector (5%), public sector (3%), and telecoms (2%).

The BSI report also pulls in data from PwC, forecasting that occupancy rates in 2013 in London will be down in the first three quarters of next year.

The PwC data predicts occupancy to be down 2.4% in Q1, 2.1% in Q2 and 6.9% in Q3.

BSI’s head of hotel product Sam Welch said: "Slow economic growth, in conjunction with a growing appetite for cost reduction and an increase in supply within the UK and internationally, should result in an even more competitive pricing environment in core locations in 2013."

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