Cardiff hotels enjoy boom year as occupancy and room rates soar on back of …

Cardiff s hotels enjoyed a strong year in the 12 months to July performing ahead of the UK average on key measures. Hotels in the city enjoyed an increase of 11.6% in revenues per room to 49.63, according to the latest PwC UK Hotels Forecast report, with further growth expected in the current financial year thanks to the Rugby World Cup and other events. Cardiff, which has more than 5,300 hotel rooms on offer, also saw a strong uplift in the average daily rate, rising 7.8% to 64.80.

The PwC analysis shows, unsurprisingly, that many of the best performing months are ones with major rugby fixtures such as the RBS 6 Nations.

Cardiff Hotels Enjoy Boom Year As Occupancy And Room Rates Soar On Back Of ... Cardiff’s Marriott and Maldron hotels

However, PwC points out that the city is increasingly focused on strengthening its corporate demand, driven by business parks such as the 100-acre Cardiff Gate site on the fringes of the city and development of a new HQ for BBC Cymru Wales.

‘We expect further growth in 2016’

According to Lynn Pamment, office senior partner for PwC in Cardiff, this should help to smooth out the peaks and troughs for Cardiff s hotels. She said: Cardiff has enjoyed a strong 12 months, experiencing not only a 3.5% rise in occupancy levels but attracting significantly higher rates per room than last year.

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We expect further growth into 2016 as the economy continues to recover across Wales, and the city continues to benefit from high profile rugby and football matches, especially during the 2015 Rugby World Cup.

With a third of Rugby World Cup matches set to be played on a Sunday – traditionally a low occupancy night the event is a great opportunity for Cardiff s hotels.

With many of the city s hotels reliant on leisure traffic to fill rooms and maintain healthy rates, the council s ongoing focus on attracting corporate and inward investment will certainly be welcome and could go a long way to securing a healthier leisure-corporate revenue equilibrium for the sector.

Bristol also did well

The PwC analysis compared the growth in Cardiff with that in Bristol, where occupancy levels reached a UK high of 80.9% in the 12 months leading to July, with only London and Southampton matching this figure.

Cardiff Hotels Enjoy Boom Year As Occupancy And Room Rates Soar On Back Of ... Bristol has also enjoyed a big upturn in hotel revenues

With more than 54,000 rooms available, Bristol secured a 12.9% uplift in revenue per room at 59.64, above the average regional rate (excluding London) of 49.60. The average daily rate in Bristol rose by 10.1% to 73.72 an increase second only to Milton Keynes, which rose by 11.9%. The city, which is currently the Green Capital of the World, is enjoying a post-recession renaissance with a significant stadium and hotel complex under construction, the creation of a new business enterprise zone which will attract corporate traffic, as well as a new modular hotel at Bristol Airport by Hampton by Hilton.

Katharine Finn, regional leader for PwC in West and Wales, said: Bristol s hotel sector has had a fantastic 12 months, recording double digit growth across both revenue per room and average daily rate, demonstrating the strength of provision and quality in the city.

However, with Cardiff continuing to rebalance its reliance on rugby and leisure markets, increasing room capacity and corporate opportunities, there is a risk we could see a reduction in overspill traffic into Bristol.

Rise in shared accommodation

The rise of shared accommodation platforms for business and leisure, such as Airbnb and FlipKey, has meant more travellers are aware of the brands and the opportunities of experiencing staying in shared space.

Cardiff Hotels Enjoy Boom Year As Occupancy And Room Rates Soar On Back Of ... Growing numbers are using platforms like Airbnb to find share accommodation space

Liz Hall, head of hospitality and leisure research at PwC, added: Numbers of Airbnb listings are increasing and this trend is likely to continue and cause localised issues for hotels, around pricing pressure and/or underutilisation, especially for undifferentiated products. Such an impact is likely to be felt more strongly by hotels in a downturn. David Trunkfield, hospitality and leisure leader at PwC, added: UK hotels continue to benefit from the improving economic and travel backdrop. So far this year, the pace of growth has been variable in London but dynamic across other UK cities, driving a bumper year in the investment market.

Hoteliers still faces plenty of challenges and geopolitical uncertainty.

New products and business models can sometimes represent a challenge for exist ing businesses.

Every so often a new trend has the potential to change the estab lished way of doing business and can leave some businesses ill prepared for the new order.

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