CRICKET’S World Cup helped Southampton’s hotel industry buck a national trend and record a big rise in business.
Professional services firm PwC found the UK hotel industry had done disappointing business over the first half of 2019.
But in Southampton, the sector saw business rise 6.2 per cent year-on-year in that period.
The report, called UK Hotels Forecast 2019-2020, reviews hotel performance over the past year and makes predictions for the next 12 months.
During June, Southampton’s occupancy levels were up 4.3 per cent on the same month in 2018, with the average daily rate (ADR) up 11 per cent – from £77.18 in 2018 to £85.75 in June 2019.
The boost coincided with the ICC Cricket World Cup’s five fixtures at the city’s Hampshire Bowl.
But over the past year, Southampton’s room revenue rose 9.8 per cent year-on-year – far ahead of the UK regional average of 2.6 per cent. The first half of 2019 has already seen a rise of 6.2 per cent.
Market conditions for regional hotels are expected to be tougher in 2020, but the report said Southampton’s growth to date in 2019 puts it in a stronger position to deal with the challenge ahead.
PwC forecasts that regional hotels generally will see a 0.6 per cent decline in occupancy growth next year, a slight improvement in room rates but a drop of 0.3 per cent in revenue per available room.
Julian Gray, senior partner at PwC’s Southampton office, said: “It’s fantastic that Southampton’s hotel industry has had such a successful year so far. This is a dynamic region and it’s exciting it has benefited from hosting global sporting events such as the Cricket World Cup.
“At PwC we are working alongside the Solent Local Enterprise Partnership to develop the Solent’s Local Industrial Strategy. It’s important that in these challenging times we recognise the role the tourism industry has in unlocking the region’s potential, and shaping it’s long-term future.”
Sam Ward, UK hotels leader at PwC, said: “The UK hotel sector is at a pivotal point. Looking ahead to 2020, while hotel performance will vary widely by geography, segment and business model, we remain overall more cautious in our outlook.
“This latest UK Hotels Forecast reflects political and economic uncertainty, weaker business and leisure confidence, and the especially high number of new hotel supply additions in some markets around the UK, which have all created challenging conditions for hoteliers.
“Sporting events have had a positive effect for hotels this summer. The ICC Cricket World Cup in particular helped boost the fortunes and particularly the ADR of hotels in hosting cities London, Manchester, Birmingham, Nottingham, Leeds and Southampton. And UEFA Euro 2020 should equally boost London and Glasgow in 2020.
“However the pressure of rising costs for operating hotels, which continues to increase above UK inflation, puts any modest revenue growth under strain. The devaluation of the pound has also pushed up the cost of importing food and drinks for hotels. Additionally, low UK unemployment rates, a reduction in EU nationals for recruitment due to Brexit concerns, and above-inflation increases in the minimum wage have all contributed to increased costs associated with acquiring, training and retaining staff.”