Report: London Hoteliers Did Not Gouge Travelers Stranded by Volcanic Ash

The eruption of the Icelandic volcano Eyjafjallajokull in April delayed air travelers around the globe as it spewed dark clouds of ash, but the volcano didn’t significantly affect business for hoteliers in London or near the two main airports serving the city, a new report by STR Global shows.

“Hoteliers did not take advantage of the stranded travelers by massively increasing their average daily rate,” the STR Global report notes. Heathrow airport had the highest increase in year-on-year on average daily rates, but it was a modest 24.5%, according to the Hendersonville, Tenn.-based provider of global hotel data.

Closures from canceled meetings and grounded airlines had no major impact on the long-term trend of growth in revenue per available room (RevPAR) for Heathrow or Gatwick airports or hotels in London, STR Global notes.

Peaks in occupancy, rather than dramatic increases in daily rates, initially drove RevPAR up, as expected. London hotels showed a 39.6% improvement in RevPAR for April through early July, compared with the same period a year earlier.

Heathrow saw a gain in RevPAR of 68.6% over the same period, and Gatwick, 42.3%. However, after the airports reopened on April 20, hotel performance fell, although events unrelated to the volcano drove revenue higher in May.

Some scientists have said that the eruption in April was 10 times more powerful than one that occurred the previous month in Iceland. Fumes melted as much as a third of glacial ice covering the volcano crater, said geophysicist Pall Einarsson of the University of Iceland, in a report by Reuters news agency.

In the volcanic region, a river broke over its banks, and explosions on the floor of the crater sounded like bombs going off, as a thick layer of ash blotted out the sun, according to the report.

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