How to Start & Run a B&B BandBED2eBook-1 | Page 22

Apart from tourist centres, such as York and Edinburgh, the north and south performance
remains divided.
Business visits to the UK increased by 2% in the first half of 2010, compared to the 26% decline
seen in Q109. Leisure visits in the same period slipped by 4%.
Branded budget operators are starting to see better times, as are luxury, said the report.
Several international operators reported seeing a return of the high-end business traveller to
upscale hotels.
Overall for the half-year London luxury ARR (Average Room Rate) has seen a 7% gain to £235.
Liz Hall, head of hotels research at PwC, said: ‘London is still driving the UK recovery,
underpinned by solid ARR gains of over 6%, as the business mix reflects more transient midweek
travellers.
‘However, consumer confidence may take a tumble this winter as government cuts, VAT increase
from 15% last year to 20% from January 2011, and a failure of incomes to keep pace with
inflation starts to hit disposable income.’
If public sector budgets are slashed by 25%, PwC estimates this could have the effect of reducing
its current forecast for 2010 RevPAR by 0.4% to 2.7% and for 2011 by 0.8% to 3.9%.
As an example to explain “RevPAR”, if you have three rooms, and charge £60 per room
per night, your theoretical maximum revenue per week is £60 x 3 x 7nights = £1,260.
However of course, in reality you will not have all rooms sold, at the full price, every
night (if you do, we’d like to read your book!). Looking at this week (7 nights): if, say,
one room is sold for four nights, one for three and one for two nights, that is nine
“room-nights” (another term you will need to use a lot in this business). If they were
sold at full price apart from one night sold at your single occupancy rate of £45, then
your revenue this week was:
8 nights at £60:
1 night at £45:
Total:
£480
£45
£525
Now, with three rooms, the total number of “available rooms” this week was 3 x 7
nights = 21.
So your “RevPAR” this week was £525/21 = £25, meaning that you average “take” per
available room per night is £25.
The relationship between the RevPAR figure for any given period and your room rate is
a good measure of success. In the above example, our actual £25 RevPAR is under half
(to be precise, 42%) of our £60 room rate.
Maximising RevPAR can clearly be achieved by:
• Increasing your occupancy rate (selling more room-nights), or
• Increasing your price (or decreasing any discounts you give), or
• Selling more rooms as double rather than single occupancy, or
• Selling more rooms with extra beds for family occupancy, or
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