Profitability and RevPAR have continued to rise across regional hotels in the second quarter of 2013, according to the latest Hotel Bulletin by HVS, AM:PM and Zolfo Cooper.
In particular, London continued to see its RevPAR rise by five per cent over the quarter, but regional sites also enjoyed a boost to payrolls, RevPAR and a fall in the amount of commission paid to travel agents.
HVS director Tim Smith said: "The performance improvement comes as a welcome relief for hotels in the regions. We need this to continue for a few months to have an impact on both the top and bottom lines, and more importantly increase confidence for both operators and investors. Only then will the recovery be truly underway."
The bad news is that supply levels continued to be down in the quarter, compared to 2012. However, Mr Smith added that this is only following the "storm of openings" during the London Olympics, and with 28,092 bedrooms currently in the pipeline for development, these negative figures are simply a "blip rather than a trend".
Budget brands are particularly looking to develop and expand over the next few years, due to them being occupied under leases and therefore able to secure funding in a tough economic climate. The report suggests that until the point where consumer confidence and funding increases, this trend is likely to continue. Debt funders are still cautious over what type of hotels they will fund, while insurance companies are entering the commercial property market but are still showing no interest in hotels.
With this lack of credit availability, this means that the hotel debt market is widening so that alternative providers can enter the hotel sector. These include debt funds, family offices and credit investors.