The Goring Hotel, London.
Hotels in the UK achieved a 2.1% increase in RevPAR this month, to £94.20, which was due to a 2.4% increase in achieved average room rate, to £116.11 and in spite of a 0.3 percentage point decline in room occupancy, to 81.1%.
Hotels in the UK maintained their upward trajectory in GOPPAR growth this month, but the marginal gains in revenue were almost entirely wiped out by increasing costs which led to a decline in profit conversion, according to the latest worldwide poll of full-service hotels from HotStats.
Hotels in the UK achieved a 2.1% increase in RevPAR this month, to £94.20, which was due to a 2.4% increase in achieved average room rate, to £116.11 and in spite of a 0.3 percentage point decline in room occupancy, to 81.1%.
Furthermore, the year-on-year growth in Rooms Revenue for hotels in the UK was supported by increases in Non-Rooms Departments, including Food and Beverage (+1.1%), Conference and Banqueting (+4.9%) and Leisure (+2.4%), on a per available room basis, contributing to the 1.8% year-on-year increase in TrevPAR this month, to £145.57.
Profit & Loss Key Performance Indicators – Total UK (in GBP)
October 2017 v October 2016
- RevPAR: +2.1% to £94.20
- TrevPAR: +1.8% to £145.57
- Payroll: + 0.4 pts to 26.6%
- GOPPAR: +1.1% to £58.77
However, the marginal levels of revenue growth in October have been outpaced by increasing costs, leading to a decline in profit conversion across a number of departments.
This has included the Food and Beverage Department, for which profit conversion dropped by 1.2 percentage points to 34.8% of Departmental Revenue, as a result of increases in Cost of Sales in Food (+1.2%) and Beverage (+0.8%), as well as Payroll (+4.3%) on a per available room basis.
That said, in spite of a 0.4 percentage point increase in Payroll, to 26.6% of total revenue, hotels in the UK recorded a 1.1% increase in GOPPAR to £58.77 in October. This is equivalent to a profit conversion of 40.4% of total revenue, a 0.3 percentage point decline, from 40.7% during the same period in 2016.
“According to the Bank of England, official data showed consumer prices increased by three per cent in the year to October 2017, the highest level in five years, led by growth in food prices and fuel costs.
Whilst 2017 is shaping up to be another positive year of revenue and profit performance for hotels in the UK, owners and operators will do well to monitor any further increases in food prices, and indeed other costs, which could challenge profitability levels in 2018,” said Pablo Alonso, CEO of HotStats.
Hotels in Manchester led the way in October as the city’s hoteliers welcomed approximately 12,000 delegates to the four-day Conservative Party Conference.
Profit & Loss Key Performance Indicators – Manchester (in GBP)
October 2017 v October 2016
- RevPAR: +12.4% to £93.16
- TrevPAR: +13.8% to £147.50
- Payroll: – 1.5 pts to 22.9%
- GOPPAR: +19.6% to £61.62
In addition to a 3.2 percentage point increase in room occupancy, to 87.5%, hotels in Manchester recorded an 8.4% increase in achieved average room rate, to £106.47, which contributed to a RevPAR peak for 2017 being achieved at £93.16.
The additional demand associated with the conference’s biannual visit to Manchester also enabled hotels to drive associated non-rooms revenues, which included a 14.7% increase in Food and Beverage Revenue and a 33.8% increase in Conference and Banqueting Revenue, on a per available room basis.
The 13.8% increase in TrevPAR, in addition to a 1.5 percentage point saving in payroll, to a lean 22.9% of total revenue, helped Manchester hotels record a 19.6% year-on-year increase in GOPPAR in October, to £61.62. This was the highest profit per room recorded in the Manchester hotel market in 2017 and equivalent to a profit conversion of 41.8% of total revenue.
“Unlike Mrs May, who stumbled through her speech and was the victim of a number of unfortunate mishaps, Manchester hoteliers enjoyed the 2017 Conservative party conference as the buoyant demand levels enabled top and bottom line performance levels to soar,” added Pablo.
At the other end of the M62, hotel performance was less inspiring, as properties in Leeds continued to suffer a decline in bottom line performance, in spite of top line increases.
Profit & Loss Key Performance Indicators – Leeds (in GBP)
October 2017 v October 2016
- RevPAR: +0.8% to £66.55
- TrevPAR: +0.6% to £114.43
- Payroll: -0.3 pts to 27.7%
- GOPPAR: -1.3% to £41.05
The 0.8% increase in RevPAR at hotels in Leeds was due to a 2.0% increase in achieved average room rate, to £81.16, which offset the -1.0-percentage point decline in room occupancy, to 82.0%.
The achieved average room rate increase at hotels in Leeds this month was fuelled by the commercial segment, with growth recorded in the achieved rate in both the corporate (+3.8%) and residential conference (+5.7%) segments.
Despite a 0.3 percentage point saving in Payroll, to 27.7% of total revenue, a muted TrevPAR increase of just 0.6%, to £114.43 was wiped out by increases in overheads. As a result, profit per room at hotels in Leeds fell by 1.3% to £41.05.
This continued the challenging trend for the year so far at Leeds hotels, which have recorded a 4.0% decline in GOPPAR for year-to-date 2017, despite a 0.5% increase in TrevPAR.
Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.
She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
