'Uncertainty' to stall trading growth of UK hotel market

Hotel trading growth is set to flatten in the year ahead due to economic uncertainty, weak business travel demand and an influx of new rooms scheduled to open across the country.

The findings come from the PricewaterhouseCooper’s (PwC) Hotels Forecast 2019 report, which predicts occupancy levels to drop by at least one percentage point, to 81 per cent, in 2019.

PwC bases its forecast partly on a slowdown in demand for rooms in London. Year-on-year occupancy growth has stalled at 0.1 per cent during 2018, with a fall predicted for 2019.

"In terms of growth 2018 has been held back by uncertainty, slower economic growth, significant supply additions and reported stuttering business travel," said Liz Hall, head of hospitality and leisure research at PwC.

"This is despite the weak pound buoying leisure travel, the Royal Wedding and the International Farnborough Air Show effect.

“For a sector heavily reliant on people to deliver its products and services, the shortfall in availability of EU nationals remains a concern for hotels and the weak pound has pushed up the costs of retaining staff and importing goods within the sector.

“Following a number of years of strong revenue growth when there was not the imperative to focus on costs, prudent operators and owners need to adopt a stringent approach to operating costs growth in 2019 to preserve profitability.”