Hospitality Industry in London Essay
The hospitality industry of London can be analyzed through certain indicators - Hospitality Industry in London Essay introduction. An analysis of these indicators can be used in entering the said industry through the establishment of a new hotel in the area. It is important to evaluate these because of the impact it has on the business decisions that are to be made and likewise serves as a preview of the market. These indicators that are helpful for such purpose are the number of people staying in London hotels, which can be defined by the occupancy rate and other relevant statistics, and the expenses incurred by people who stay in the hotel according to several categories.
London has continued to enjoy a stream of international visitors where 72% of these enter UK through the capital and spends time with 40% night stay (Grant Thornton & The Leisure and Tourism Organisation, 2006). Moreover, people from different regions of the world has also come to stay in hotels in London including the countries of USA, France, Germany, Asia Pacific, Middle East, China, and India (Grant Thornton & The Leisure and Tourism Organisation, 2006). On the other hand, the business persons comprise 27% of the total population for the year 2004 (Grant Thornton & The Leisure and Tourism Organisation, 2006). This is shown in the table below adopted from the study made by the Grant Thornton & The Leisure and Tourism Organisation (2006).
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Table 1. Purpose of International Visit Trips
Visiting family or relatives
Source: IPS Travel Trends, 2004
On the other hand, the forecasted occupancy rate for 2009 reaches up to 80.4 % out of the 142,875 bedspaces for hotels in London (Grant Thornton & The Leisure and Tourism Organisation, 2006; PriceWaterhouseCoppers, 2008). This is given consideration in light of the difficult economic situations faced by the country as a result of the economic difficulties that impact the industry from different sides of the globe (Alcantara, 2009). However, the luxury hotels are expected to have a considerable share because of the strength that the local economy displays (PricewaterhouseCoopers, 2007).
As for the prices of the hotel rooms made available in London, it could be found that the forecasted average room rate for 2009 is ₤96.41 (PricewaterhouseCoopers, 2009). However, it remains that the luxury hotel room rates in London is expected to be over ₤360 for the year 2008. A trend can be shown from 2006, 2007, and 2008 in table 2 below.
Table 2.PricewaterhouseCoopers Latest Forecast for London September 2007
Average Room Rate (₤)
Source: PricewaterhouseCoopers Forecasting Model, September 2007
Thus, it can be observed in the table that the expected expenditure for staying in a hotel is most likely to increase in terms of its average. Moreover, there are expectations that the rate for the luxury hotels is going to increase, too.
Thus, it can be found that the people who stay in London hotels have their own set of characteristics that need to be considered together with the viability of the hotel rates that could be forecasted for the hotel sector of the country. These are information which are essential in making the business decision related to the establishment of a new hotel.
Alcantara, N. (2009). UK hotels ‘experienced difficult operating environment’ in January, data reveals. Retrieved March 21, 2009, from http://www.eturbonews.com/7751/uk-hotels-experienced-difficult-operating-environment-january-dat.
Grant Thornton & The Leisure and Tourism Organisation. (2006). Hotel demand study. London, UK: Greater London Authority.
PricewaterhouseCoopers. (2007). Hospitality directions Europe edition. Retrieved March 21, 2009, from http://www.hospitalitynet.org/file/152003112.pdf.
PricewaterhouseCoopers. (2007). London boosts UK hotels market but cautious times ahead. Retrieved March 21, 2009, from http://www.hospitalitynet.org/news/4033100.html.
PricewaterhouseCoopers. (2008).UK hotels: Early check-out for good times. Retrieved March 20, 2009, from http://www.pwc.co.uk/pdf/UK_Hotels_early_check-out_for_good_times.pdf.
PricewaterhouseCoopers. (2009). Hospitality directions Europe: revisions to forecast January 2009. Retrieved March 21, 2009, from http://www.pwc.co.uk/eng/industries/hospitality_and_leisure_revpar_update_january_2009.html.