Hotelier fears an Olympic hangover

Hotelier Millennium & Copthorne fears a post-Olympic hangover could hit growth in London, which along with buoyant Asian markets, offset weakness in mainland Europe in the first quarter.

“The fourth quarter... will be something we have to watch very closely for the impact on London. That will be the key place for us to watch,” Wong Hong Ren, chief executive of the operator of over 100 hotels worldwide, said.

Ren said M&C was seeing strong demand for its London hotels during the Olympic period, but was worried that later in the year the impact of Europe’s economic woes would deter cash-strapped Europeans from visiting the UK capital.

Sign up to our Business newsletter

Sign up to our Business newsletter

London-based M&C, which posted a 31.5 per cent rise in first-quarter pre-tax profit, said it is looking to diversify its customer base as visitor numbers from Greece, Spain, Ireland and Italy slump and show no signs of improvement.

“We are watching these spots very carefully, especially places like Spain, which is a traditionally important market for shopping (in London) in December,” Ren said.

M&C said revenue per available room (RevPAR), a key industry measure, rose by 5.6 per cent on a like-for-like basis, driven higher mainly by pricier rooms.

Revenue per available room increased by 7.7 per cent in Singapore and 7 per cent in London. But the strongest growth came out of the ‘Rest of Asia’ region, including hotels in Seoul, Kuala Lumpur, Jakarta and Beijing, where RevPAR increased by 21.6 per cent.

However, the ‘Rest of Europe’ region underperformed, with RevPAR declining 5.4 per cent.