Capital's hotels are cashing in

LONDON's hoteliers are increasingly hoisting the 'no vacancies' sign and charging customers a premium for their rooms.

Latest figures reveal that hotels in the capital last year increased profits per available room by almost 14% to to £17,646. Over 2004, the average room rate achieved was £88.07, a rise of 7.1% and average occupancy rates increased to more than four in five, up 3.8 percentage points to 80.9%.

Jonathan Langston, managing director of TRI Hospitality Consulting which compiled the figures, said: 'They clearly show that a strong recovery in the hotel industry began last year. Hoteliers are not just doing more business but they are making more money in the process.

'The terrific performance of 2004 was against a weak set of comparative results. Despite the strength of 2004, we still expect significant growth to come in 2005.'

TRI predicts that underlying revenues will rise by 9% in 2005. 'The continuing strong economy, low and steady inflation and the probable peaking of interest rates have increased confidence among hoteliers, outweighing fears over a possible terrorist attack or the depreciating dollar deterring visitors from the US,' says the consultancy in a report.