Ash cloud has no lasting affect on airport hotels
12.07.10
The fear of further airport closures and flight cancellationsfrom the ash cloud has had no significant effect on the long-term trend of growth in revenue per available room (RevPAR - a rough measure of average room rates) for hotels near Gatwick and Heathrow airports, according to data from STR Global.
Hotels near the two airports saw initial RevPAR gains at the time of the first closures and flight cancellations. However, they did not take advantage of the situation by massively increasing room rates. Heathrow saw the highest increase in year-on-year rolling-7 average, but this was, for the circumstances, relatively modest at 24.5% and was driven by higher room occupancy and not an increase room rates.
For the period between the beginning of April to early July, the change in year-on-year RevPAR, measured using a 7 day average ADR (in which each day is the sum of the 6 days ahead to even out the effect of weekdays and weekends), Heathrow and Gatwick peaked during the initial closured in mid-April - up 68.6% and 42.3% respoctively.
In contrast, hotel performance fell significantly below trend in the days immediately following the reopening of the airports on April 20, because of significant cancellations of meetings and group business made in the light of the uncertainty over flights. Later, in mid-May, the closures saw a more modest reaction as passengers coped better with the problem.
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