The benefits of the recent heatwave attracting visitors to London could soon be reflected in results from several quoted hotel operators with sites in the Capital.

Revenue per available room (RevPAR) increased by a record 9% to £156.15 in July, according to data from industry specialist STR. That beat levels seen in the 2012 Olympics and was also helped by several popular events bringing people to London including Wimbledon and Pride.

RevPAR is a vital measure of how well hotels can fill their rooms and is calculated by multiplying the average daily room rate by the occupancy rate.

Potential beneficiaries among UK-quoted stocks include Premier Inn owner Whitbread (WTB), Dalata Hotels (DAL), PPHE Hotel (PPH) and InterContinental Hotels (IHG).

For Whitbread and InterContinental, the anticipated boost will be welcome as trading in London was disappointing earlier this year.

In the three months to 31 May, like-for-like sales at Whitbread-owned Premier Inn fell 0.9% amid weaker market conditions in London and a strong comparative to last year. For InterContinental, trading in London was also underwhelming in the first half of 2018 with RevPAR down 1.4%.

Dalata and PPHE Hotel are two of Shares’ running Great Ideas. Davy Research analyst Joseph Quinn is confident that Dalata can continue to outperform in the UK and he forecasts 3.5% RevPAR growth for the company’s UK operations this year.

‘We continue to believe that Dalata should outperform the broader market given its ongoing efforts to improve yield through areas such as revenue management on a decentralise basis,’ comments Quinn.

Outside of the UK, Dalata is expected to deliver 5.5% RevPAR growth in Dublin and a 5% increase in regional Ireland. (LMJ)

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