City hotels see yields hit by discounting

NORTH West hotels saw a disappointing start to 2012, with room rates falling as operators were forced to offer discounts to woo guests.

Figures for January from PKF Hotel Consultancy Services show that while occupancy rates were ahead in both Liverpool and Manchester during the month, room rates fell.

Occupancy rates were up in Manchester by 2.1% from 61.3% to 62.6%, but average room rate slumped 12.1% from £62.57 to £55.03. This triggered a fall in room yield from £38.35 to £34.45, a 10.2% fall when compared to the same time last year.

Liverpool posted similar results with a 0.6% increase in occupancy rates from 61.3% to 62.6%.  Room rates which fell 6.4% from £59.56 to £55.75. Overall this led to a 5.9% fall in yield from £34.53 to £32.50.

There was a better performance in the smaller locations, with positivity in both Chester and Blackpool.

In Chester occupancy rates were up 11.6% from 43.6% to 48.7%, and although room rate fell 9.4% to £46.51, hotels in the city enjoyed rooms yield growth of 1.2% from £22.39 to £22.65.

Only Blackpool bucked this trend and posted positive results. Occupancy rose by 16.1% from 42.5% in 2011 to 49.3% in 2012. Room rate fell from £60.41 to £59.15, but thanks to the positive occupancy results this led to growth in rooms yield of 13.7% from £25.65 to £29.16.  

Ian Bingham, Manchester-based partner at PKF, commented: “Performance in the North West region has been disappointing if not entirely surprising.

“Hotels have been forced to slash rates dramatically to attract price conscious corporate and leisure customers. This approach is helping to increase occupancy but at the expense of yield.”