The Yorkshire hotel sector saw a strong start to the year outperforming many other UK regions, with events such as the Tour de France giving hotels in major Yorkshire cities a flying start.
According to statistics from PwC, in July alone hotels in York were virtually full up (as they were in July 2013) and were enjoying 92.1% occupancy.
As a tourist magnet and business centre, York also saw a significant 6.6% rise in occupancy levels between January and August and the city recorded occupancy at 83.6%, higher than London achieved over this period.
Leeds and Sheffield saw more modest occupancy growth over the eight months, 77% and 72% respectively.
High occupancies have reportedly also helped hoteliers raise rates. Leeds has seen strong rates growth throughout 2014 but average daily rate (ADR) significantly increased in July, rising by 17.1% to £65.95 as the Tour de France boosted the sector.
Overall ADR is up in Yorkshire 9.6% for the first eight months of the year. York saw ADR up 9% in July as the city hosted the departure of the second Tour de France stage.
York hoteliers saw ADR up almost 7.5% for the first eight months, taking rates to an average of almost £10 higher than the average for the UK Regions as a whole, £72.30.
At the end of June there were around 23,000 rooms in the UK development pipeline expected to open in 2014 and 2015, around 500 of these new rooms are expected in Yorkshire, including the 206 room Hilton Leeds Arena and a 102 room Hotel Indigo in York.
A further 400 rooms are due to open in 2016 including the 5 star, 300 room Flaxby Country Resort Yorkshire to be set in 283 acres near Knaresborough.
Andy Ward, PwC’s Yorkshire property leader said: “It is great to see hotels fortunes reviving with many cities enjoying a strong start to the year. Full hotels and higher rates translates into double digit RevPAR (revenue per available room) growth (a key industry metric) of 13.4% in York and 12.7% in Leeds for the first eight months of the year – above the UK regional average.
“We expect further growth in 2015 as the economy continues to recover across the region, along with the halo effect for future tourism from the Tour de France and from demand to attend Rugby World Cup matches taking place in Leeds.
“With one of the RWC matches set to be played on a Sunday – traditionally a low occupancy night – the event is another great opportunity for hotels.”
“Overall, the general feeling is that supply is not currently an issue across the UK. However, in some areas more new hotels may exacerbate any demand weakness. We would expect the development pace to accelerate more steeply as economic growth takes hold and access to financing improves.”
Nationally, overall strong trading and low supply mean that for the 2014 outturn, PwC expect 3% occupancy growth taking occupancy overall to 75% – the highest for 14 years, almost 4% average daily rate (ADR) growth to £62 and 7% RevPAR growth to £46.37, which is the highest since 2001.
With occupancy at very high levels, PwC forecasts occupancy growth to moderate a tad in 2015 with a 1.6% gain taking occupancy to 76%. We anticipate 4.3% growth in ADR will mean rates average almost £65.
This combination will drive further RevPAR growth of 6% to take yields to almost £50 – the best result ever in nominal terms although there is still some ground to make up in real terms