London hotels saw sales drop by 3.5 per cent during the month of July, a period that includes the immediate affects of the terrorist incidents on July 7 and July 21, according to the latest figures from TRI Hospitality Consulting's monthly HotStats survey.

The room revenue per available room (revpar) drop was driven by a 3.5 percentage point fall in occupancy from 85.9 per cent in July 2004 to 82.4 per cent in July this year.

"The fall in July was much more modest than might have been feared. It was also mitigated by the absence of the bi-annual Farnborough International Air Show in 2005 will have depressed results," says Jonathan Langston, managing director of TRI Hospitality Consulting.

Room rates continued their upward trend with a 1.2 per cent rise to £89.63. This rise was more modest than the prevailing rate of increase in the year to date, which stands at 3.2% for the first seven months.

"Rate remained robust, which shows hoteliers have not taken panic action as occupancy dropped. Equally, the absence of a strong rise in room rates shows that the initial allegations of profiteering by London hotels in the aftermath of the bombs is wide of the mark," says Langston.

There was little impact outside of London, with room revpar in the provinces growing by 1.3 per cent for the month of July to reach £51.44. Occupancy dropped slightly, down 0.8 points to 76.0 per cent, but room rate rose by 2.4 per cent to £67.71.

"Despite London's role as the gateway to the UK for most overseas visitors, hotels outside of London have been left almost unscathed by the after effects of the terrorist attacks," says Langston.

Year-to-date figures for the first seven months of 2005 show room revpar growing by 3.1 per cent, caused mainly by the 3.5 per cent rise in room rate to £74.43. Occupancy is down slightly by 0.3 points to 72.7 per cent.

Visitor numbers set to rise

The Tourism Industry Emergency Response Group (TIER), the grouping of tourism related organisations coordinated by tourist board Visit Britain to respond to the events of July 7 and July 21, is predicting that visitor numbers to London will rise by six per cent in London for the whole of 2005 compared to 2004. Spending is forecast to rise by eight per cent.

TIER commented that the strong start to the first half of 2005 together with the relative strength in the inbound market means that any shortfall in domestic demand for visits to the capital will be compensated for.

The first six months of this year showed a 12.4 per cent increase on 2004's record levels of international visitor numbers to the UK. Spending was up 12.1 per cent.

According to UKinbound, one of the members of TIER, visitor numbers in June were up 5.8 per cent. Forward bookings were up 0.7 per cent.

Government figures from National Statistics showed visitor numbers were up 11 per cent for the three months to the end of June. Spending was up six per cent.

Airports operator BAA, which runs both Heathrow and Gatwick, said it saw 2.6 per cent more passengers in July than in the same month a year earlier. Heathrow was alone among the seven UK airports operated in seeing a drop of 0.6 per cent in passenger numbers. BAA said the fall was a result of the bombings.

"There is no denying that the bombs inflicted damage on the travel and tourism industry in the UK. But the early signs are that this will be short-lived and relatively slight," says Langston.