PricewaterhouseCoopers (PwC) has revealed the preliminary findings of its UK Hotels Forecast for 2012 and 2013.
In its report, PwC predicts that the London 2012 Games will make for a record year in the capital as hotels will achieve an average RevPAR growth of 2.8 per cent.
Hotels should also see a positive impact on occupancy of almost 1.2 per cent in London and 0.9 per cent outside the capital – taking total occupancy close to 84 per cent in London and 72 per cent outside the capital.
If achieved, it would be the highest annual occupancy seen in London since the 1970s and the highest ever in the regions.
PwC figures also show that the level of new low cost supply in the capital is rapidly increasing. In the last three years London has seen a 13 per cent increase in the number of budget rooms and will have approaching 24,000 budget rooms by the end of this year.
The anlyst warned, however, that in 2013 a post Olympic dip and supply spike will mean weaker trading for London during the year after the Games.
Liz Hall, head of hospitality and leisure research at PwC, said: “For London in Q3 we expect occupancy to hit almost 92 per cent and with rates at £156 pushing RevPAR to almost £144, a growth rate of more than 21 per cent over Q3 2011.
“Looking ahead to 2013, however, lower demand and the east London supply spike look likely to depress trading in London.
“With no quick relief for squeezed consumer spending, a supply overhang and some difficult comparables in Q3, we anticipate a 3 per cent occupancy fall to an average 81 per cent in 2013.”