London hoteliers are expected to face a drop in revenue per available room in 2009, according to a report from Deloitte.

London hoteliers are expected to see a 12.7% drop in revenue per available room (revPAR) by the end of 2009 according to Hotel Market Outlook, a quarterly report released by Deloitte, the global accountancy and consulting firm.

The report uses the outputs of an econometric model produced by an independent economic research group to produce forward looking changes in hotel performance.

London is expected to see greater falls in revPAR than in the regions, peaking in the third quarter, down 15.6%. The overall outlook for 2009 is expected to see a £12 fall in revPAR to £82 driven by a 5.8% decline in occupancy and a 7.3% decrease in average room rates.

Regional UK hotels are not expected to suffer as much as those in London, with revPAR falling 7.8%, as occupancy drops 2.9% and average room rates decline by 5.1%. Overall, revPAR is expected to settle at £44 for the year.

While the report suggests that hotels across the regions could start to recover in early 2010, those based in the capital are likely to face a further disappointing year.

Marvin Rust, Hospitality Managing Partner at Deloitte said: “Looking back over the past quarter of a century, there has been a close link between changes in GDP growth and revPAR changes across the UK.

“The econometric model utilised in Hotel Market Outlook projects GDP to decrease by 2.5% in 2009 and 0.5% growth for 2010. If the UK hotel industry compares as closely in this downturn with that of 1990 to 1991 revPAR declines could be more dramatic than the model currently suggests.

On the plus side, the decline in Sterling against source market currencies such as the Euro and the US Dollar will provide some stimulus for overseas visitors to come to the UK and London in particular. In addition, more of us will stay at home this summer.”

The outlook is produced using data from an inconsistent sample of hotels collected by STR Global Limited. This data is fed into an econometric model developed by the independent economic research firm, e-forecasting Inc, to produce hotel performance outlooks for the London and Regional UK markets.