Weaker sterling boosts profit for UK hotel groups.
Byline: JESS CLARK @jclarkjourno
THE TOP 100 UK hotel groups saw profit break the PS1bn barrier last year as the weaker pound encouraged Brits to holiday at home.
Profit rose 83 per cent year-on-year from PS583m as overseas tourists were also encouraged to visit the UK due to the weak exchange rate.
Revenue was up 1.5 per cent from PS6.8bn to PS6.9bn in 2019, according to the research published today by law firm Boodle Hatfield.
Visiting the UK has become cheaper for foreign tourists and the weak exchange rate has seen UK citizens choose breaks in cities such as London, Edinburgh and York rather than other European cities, including Barcelona or Berlin.
"UK hotels are thriving as the country fast becomes a staycation nation," Boodle Hatfield real estate partner Rajeev Joshi said.
The budget hotel sector is also growing at a faster rate than the rest of the market.
Turnover at the five leading budget hotel chains increased seven per cent in the year, from PS1.7bn to PS1.9bn.
The "staycation" trend is being driven by millennials attracted to affordability, city centre locations and the environmental benefits of avoiding plane travel.
Joshi added: "Improving hotel standards and consistently warmer summers mean that staycations in the UK are becoming increasingly popular.
"Twenty years ago, a 'staycation' would have been chosen mainly on a cost basis but it's now an increasingly fashionable choice."
"Over the past year, London also seems to have won over many European tourists who may have otherwise visited other cities such as Paris, which has suffered from the high profile 'gilets jaunes' protests.
"Last year, the UK also benefited from events such as the royal wedding, which has boosted the status of UK in key markets like the US."
He added that hotel profits have also been boosted by one-off asset sales, meaning that companies need to continue to increase revenue and keep costs under control.
London hotels won out over those in Paris or Berlin due to the weak pound
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|Publication:||City AM (London, England)|
|Date:||Aug 5, 2019|
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