Belfast hotel room revenue down as supply now outstrips demand
Over-supply of hotel rooms in Belfast means they are making less money, even though more guests have been coming, according to a report today.
The research by advisory firm PwC said that golf tournament The Open had delivered a 27% gain in revenue per room in July over the same month in 2018.
However, revenue per available room in Belfast over the year so far is down by 15.4%, the steepest fall in 22 UK cities, according to PwC.
The fall comes after an increase in room numbers of around 10% in Belfast over the last year, with around 494 new rooms added. And over the last two years, 1,500 rooms have been added in the province as a whole - the majority in Belfast.
There were 142 registered hotels in May this year.
New openings include the city's AC Marriott Hotel on City Quays and the Hampton by Hilton on Hope Street. And more new hotels are tipped to open over the remainder of 2019 and in 2020.
However, the future of at least two - The Waring and The Lanyon at Crumlin Road Courthouse - are now in doubt after their owner Lawrence Kenwright put them on the market.
Please log in or register with belfasttelegraph.co.uk for free access to this article.
And no opening date has been given for Mr Kenwright's proposed George Best Hotel.
Martin Cowie, PwC NI partner, said: "With continuing Brexit-related uncertainty, potential further volatility in economic growth and declining business confidence, the hotel sector is facing strong headwinds.
"Having already seen record growth in new hotel rooms over the last two years, around 640 more rooms are set to open in Belfast over the rest of the year, with an additional 165 planned for 2020. An increased spike is likely to create an even more competitive environment in the city."
But he said hotels should "turn disruption into opportunity". "Digital transformation continues to be an important focus, and it will be critical for companies to manage rapidly evolving guest expectations and the increased digitisation of hotel services, while retaining loyal visitors."
The Hotel Forecast 2020 also predicts that hotel trading will stall next year.
Between June 2018 and June this year there had been a 10% increase in rooms sold in Belfast - five times the national average. People were being drawn by attractions such as Game Of Thrones, much of which was filmed in Northern Ireland, and The Open, which took place in July.
But the increase in visitors could not balance out the growth in new rooms. Room numbers were up by 10% to 5,287, with occupancy levels down 20%.
And the fall in revenue per available room contrasted with growth of 4.6% the year before.
And compared to Belfast's fall of 15.4%, the average UK Revpar fall was 1.8%.
Revenue per available room, also known as RevPAR, is an industry measure calculated by multiplying the average achieved room rate by the average annual room occupancy rate.