Average daily rate (ADR) in UK hotels rose in November as COP26 boosted demand, according to the RSM Hotels Tracker.
The data, compiled and produced by STR and analysed by RSM, shows the ADR across the UK increased to £100 from £98 in October, with Scotland enjoying a huge spike of £23 from £98 in October to £121 in November.
UK hotel occupancy rates decreased in line with pre-pandemic seasonal trends to 68 per cent, and still remain 10 per cent lower than pre-pandemic levels. London saw increased occupancy levels for the fifth consecutive month moving up to 66 per cent from 65 per cent and saw ADR almost reach pre-pandemic levels at £152.
After a staycation peak in August, Wales’ occupancy rates have continued to fall to 69 per cent from 86 per cent in the summer. However, ADR still remains significantly higher than pre-pandemic levels at £74.
Chris Tate, head of hotels and accommodation at RSM, said: ‘The UK hotel sector saw a welcome, but short-lived, boost in average daily rates as demand for accommodation during COP26 helped to boost prices throughout November.
'London had a strong month with occupancy levels up and room rates nearing pre-pandemic rates. However, supply in London is being restricted as some hotels are withholding rooms due to lower demand and staff shortages, so available rooms are commanding higher prices.
'Unfortunately Omicron has placed the sector into reverse. Last month forward bookings were signalling a bumper Christmas for London but cancelled theatre trips, Christmas parties and New Year’s Eve celebrations will all hit the hotel sector hard in December. This latest twist will not only see a loss of income, but it will compound pressure on staff shortages as Covid absences spike.
'Without a strong December, some hotels will have no buffer to ride out the slower months of January and February, which could lead to business distress in the New Year; particularly as the rent moratorium and VAT relief ends in March 2022.’