• TRI forecasts slower revpar growth and records weaker profit

The UK hotel industry is set to break beyond its previous revpar peak during this year, according to forecasts by TRI Hospitality Consulting.

But while heading past the previous revpar highpoint achieved in 2000, thanks to the anticipated 5.2% rise, is good news the industry still has a way to go both in inflation-adjusted terms and profit wise.

The UK industry has now enjoyed two years of revpar growth – in 2004 and 2005 – after suffering three years of decline following the peak year of 2000. But the growth rate began slowing in 2004 and, far more worrying, profit actually retrenched during 2005.

The TRI sample of 613 hotels found that in 2005, GOP per available room was fractionally down on 2004. TRI used the year 1996 as the index year, representing 100.0 and it found that in 2004 the index was 117.4 and in 2005 it was 117.3.

The previous profit peak was in 1998 with an index figure of 135.2. This saw a steady decline until 2002 when it dropped 11.2 points and then again in 2003, when it dropped eight points.

If the revpar growth rate is already slowing, the industry will struggle to reach the previous profit peak. According to the TRI figures, the industry remains below the profit levels achieved in 1996 on an inflation adjusted basis. Getting beyond 1996 levels on this basis looks challenging, let alone breaching the peak achieved in 1998.

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