MONTH IN REVIEW
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CONSUMER SPENDING
Hotels defy
consumer
spending decline
in December
Consumer spending continued to fall
in the month of December with a 1%
decline, however hotels managed to
defy the trend.
This is according to Visa’s UK
Consumer Spending Index, which
showed that overall expenditure
declined 1% year-on-year in December -
the fastest decline seen since April.
However hotels and restaurants
outperformed other UK sectors as it
experienced a 7.6% increase in spending
in December, which is the joint-quickest
rate of increase in the past 20 months.
For the whole of 2018 Visa’s index
found expenditure has fallen in eight
months of the year, underscoring
“a relatively weak overall picture of
household spending”. Lower expenditure
was largely driven by a disappointing
performance by the high street, as ‘face-
to-face’ spending fell -1.6% on an annual
basis in December.
Visa also found that online spending
remained “relatively subdued”, with
expenditure rising by just 0.5% year-
on-year.
Adolfo Laurenti, European principal
economist at Visa, said: “The further
decline in UK consumer spending in
December 2018 is a disappointment,
but not a surprise. Notwithstanding a
backdrop of low unemployment and
rising wages, households remained very
cautious at the end of the year - as they
were for most of 2018.
“An acceleration in spending at hotels,
restaurants and bars (+7.6% year-on-
year) suggests that some categories of
discretionary spending are holding up
better than the market as a whole. And
the modest pickup in ecommerce point
to the resilience of digital channels of
distribution, a favorable long-term trend
that recent woes have not derailed.”
February 2019
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SALES GROWTH
Premier Inn
owner sees total
sales up 2.5% for
third quarter
Whitbread, the owner of Premier Inn, has
reported a 2.5% total sales growth for the
hotel brand its its Q3 trade report.
The UK business achieved a total
accommodation sales growth of 3.5%
in the third quarter, which group said
reflected a “strong central London
market and a weak regional market”.
Additionally, over 2,000 new rooms
have been added in FY19 so far, and
the group said “occupancy remained”
high at over 80%.
Whitbread said it is now a “focused
hotel business”, with over 800 hotels in
the UK, Germany and the Middle East
operating under the Premier Inn brand,
and a “committed pipeline of over
20,000 additional rooms”.
Whitbread CEO Alison Brittain said:
“We are cautious about the macro
environment for the next financial
year due to increased uncertainty and
continuing high inflation. Although we
are confident in our ability to create
value from ongoing investment in
the UK and increasing investment
in international growth, in this
environment we expect underlying
profit before tax in FY20 to be
consistent with this year.”
She added: “Our unique model and
leading market position in the UK
puts us in a strong position to capture
structural growth opportunities in the
UK and internationally.”
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LXR properties are truly
best-in-class hotels,
known for their distinctive
character and unrivalled
service
Martin Rinck, Hilton
REVENUE GROWTH
UK hotel market
to continue
growth in 2019
according to
Chrisite & Co
Despite “growing operational costs”
and “concerns over staff recruitment in
post-Brexit Britain”, the UK hotel market
showed encouraging signs of growth
in 2018 which looks set to continue in
2019, according to the latest annual
report by Christie & Co.
The report, ‘Business Outlook 2019:
Navigate, Innovate, Accelerate’ forecast
that RevPAR growth in both London and
the UK regions would be steady, with
growth of +0.6% and +0.7% in London
and the regions respectively, between
2018 and 2019. Supply was also found to
show healthy increases, with many of the
major British cities such as Manchester,
Belfast and Edinburgh seeing “strong”
pipelines in the year ahead.
The report also found international
investment continued to be a key driver,
with Christie & Co identifying capital
from across the globe, particularly
from European investors making up
more than 50% of UK investment in
2018. Average prices also remained
economically positive throughout 2018
with hotels seeing a 4% increase.
Brexit was identified as a “pivotal
factor” for businesses within the
hospitality sector in the UK, which
employs around 400,000 EU migrant
workers, and Christie & Co said any
changes to immigration policies “could
have a notable impact”.
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