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UK hotel gross operating profits remained flat at 36.8% in May 2026 year on year, despite higher room rates and a seasonal boost in demand from half-term, the bank holiday and warm weather, according to the latest RSM UK Hotel Tracker.
The data, compiled by Hotstats and analysed by RSM UK, showed occupancy levels across UK hotels edged up from 79.4% to 79.7% in May compared with the same period last year. In London, occupancy remained flat at 82%.
Room rates increased more strongly over the period, with average daily rates (ADR) rising 4% in the UK from £150.82 to £156.72. In London, ADR increased 4.6% from £209.70 to £219.37. This helped push revenue per available room (RevPAR) higher, up from £119.74 to £124.84 across the UK and from £171.76 to £179.89 in London.
Despite the improvement in revenue indicators, gross operating profits were unchanged year on year, remaining at 36.8% across the UK and 39.3% in London.
Chris Tate, partner and head of hotels at RSM UK, said: “What may appear to be small improvements in occupancy should be seen as a positive, as this is based on historic highs. Strong occupancy levels combined with inflation-busting rises in room rates show consumer demand is still there. May’s heatwave timed nicely with half-term and the bank holiday weekend, which dealt hoteliers a welcome boost, particularly with consumers currently favouring last-minute bookings. Without the good weather, there’s every possibility that growth would’ve gone backwards.
“Despite the increase in top line, this failed to filter through to profits due to the high cost burden faced by the hotel industry. Previous tax changes, increases in national minimum wage and high energy costs highlight the limited capacity hotels have to absorb additional costs.”
Thomas Pugh, chief economist at RSM UK, added: “Even with the recent drop in oil prices, the latter half of the year continues to look tough for consumers, with real household disposable incomes set to all but stagnate this year as the weaker labour market weighs on pay growth.
“The good news is that consumer confidence is holding up slightly better than expected so far and households are saving a large portion of their incomes, which means there’s scope to offset the impact of weaker real income growth on spending by saving a bit less. Indeed, the savings ratio already declined from 9.6% to 8.9% in Q1, which allowed consumption to jump 0.6% despite a fall in real household incomes.”
UK hotel gross operating profits remained flat at 36.8% in May 2026 year on year, despite higher room rates and a seasonal boost in demand from half-term, the bank holiday and warm weather, according to the latest RSM UK Hotel Tracker.
The data, compiled by Hotstats and analysed by RSM UK, showed occupancy levels across UK hotels edged up from 79.4% to 79.7% in May compared with the same period last year. In London, occupancy remained flat at 82%.
Room rates increased more strongly over the period, with average daily rates (ADR) rising 4% in the UK from £150.82 to £156.72. In London, ADR increased 4.6% from £209.70 to £219.37. This helped push revenue per available room (RevPAR) higher, up from £119.74 to £124.84 across the UK and from £171.76 to £179.89 in London.
Despite the improvement in revenue indicators, gross operating profits were unchanged year on year, remaining at 36.8% across the UK and 39.3% in London.
Chris Tate, partner and head of hotels at RSM UK, said: “What may appear to be small improvements in occupancy should be seen as a positive, as this is based on historic highs. Strong occupancy levels combined with inflation-busting rises in room rates show consumer demand is still there. May’s heatwave timed nicely with half-term and the bank holiday weekend, which dealt hoteliers a welcome boost, particularly with consumers currently favouring last-minute bookings. Without the good weather, there’s every possibility that growth would’ve gone backwards.
“Despite the increase in top line, this failed to filter through to profits due to the high cost burden faced by the hotel industry. Previous tax changes, increases in national minimum wage and high energy costs highlight the limited capacity hotels have to absorb additional costs.”
Thomas Pugh, chief economist at RSM UK, added: “Even with the recent drop in oil prices, the latter half of the year continues to look tough for consumers, with real household disposable incomes set to all but stagnate this year as the weaker labour market weighs on pay growth.
“The good news is that consumer confidence is holding up slightly better than expected so far and households are saving a large portion of their incomes, which means there’s scope to offset the impact of weaker real income growth on spending by saving a bit less. Indeed, the savings ratio already declined from 9.6% to 8.9% in Q1, which allowed consumption to jump 0.6% despite a fall in real household incomes.”
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It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution
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