London average room rate in November 2008 dropped 5.6% to £130 per night from November 2007 rates.
For Americans, that comes out to $200USD per night at today’s exchange rate of $1.54 = £ 1. That sounds expensive , yet compared to November 2007 when the average room rate was over £137 per night and the exchange rate was $2.02 = £ 1, the average room rate has dropped from $277 per night to $200US. That is nearly a 30% reduction in room rates for the American tourist in one year.
The Euro has also gained in value from 1.40€ per £ 1 in December 2007 to just 1.10 € per £ 1 currently. The reduction in price of UK hotels by 20 to 30% for Europeans and Americans still has not generated increased tourism.
UK Hotel Occupancy Declines from November 2007 to November 2008
London – 6% to 79.5% occupancy in November 2008
I think the hotel consumer needs to keep in mind while reading all the doom and gloom hotel news in late 2008 that 2007 was a peak in hotel room rates. London hotels made record profits in 2007 and occupancy was at its highest in ten years since 1997.
The fact that airfare is a bargain during this final quarter of 2008, hotels in London and the UK cost 20 to 30% less than a year ago for millions of tourists, and occupancy is still declining at an accelererating rate indicates 2009 will be a year of remarkable value for travelers able to take advantage of the hotel economy downturn for some personal leisure benefits.
Story sources:
PKF Consulting April 11, 2008 – UK hotel sector well-positioned for challenging 2008.
Hotel Travel News November 14, 2008 – London Hotels Set for Tough Year
Hotel Travel news December 15, 2008 – UK Hotels Feel the Pinch
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