Hotel demand ‘holds strong’ while staff costs eat into profit

Occupancy of hotels has risen but higher staff costs mean profitability has fallen

Demand for UK hotels rose in August, although higher staff costs means that hoteliers saw profit drop.

Occupancy increased from 81.4 per cent to 82.1 per cent in August year-on-year, and rose slightly from 84.2 per cent to 84.5 per cent in London, according to RSM and Hotstats.

But room rates remained flat as consumers continued to struggle with a cost of living crisis – the average UK adult has seen monthly income drop by £224 year on year.

This, along with higher staff costs due to tax increases, meant gross operating profits of UK hotels fell from 38.1 per cent to 37.5 per cent in August year-on-year and from 41.2 per cent to 39.9 per cent in London.

“August was a mixed month for the UK hotel se