HotStats European Chain Hotels Market Review – August 2014
Rates in Dublin and Vienna pushed profits up
Dublin and Vienna recorded double-digit increases in average room rate (ARR) which contributed to surges in gross operating profit per available room (GOPPAR) of 21.9% and 25.0% for the month of August, according to the latest data from HotStats.
Hotels in Dublin increased ARR by 10.6% and occupancy remained virtually flat at 90.7%, as a result rooms revenue per available room (RevPAR) rose by 10.3%. A closer look at the segmentation for August demonstrates that all segment rates increased with Residential Conference rate (accounting for 5.1% of the business mix) being the only exception declining by 6.5%. Prominent segments in terms of rooms sold were Leisure (28.3%), Tours/Groups (18.8%) and Corporate (18.3%) with rates increasing by 5.8%, 24.8% and 9.0% respectively. With positive movements recorded in non-rooms revenues, total revenue per available room (TRevPAR) rose by 8.5% and astute cost control helped to deliver the GOPPAR growth of 21.9%.
Vienna hotels also experienced a surge in ARR of 10.8%, but with occupancy increasing by 0.9 percentage points leading to a RevPAR growth of 12.0% in August. A similar look at the segmentation reveals that all segment rates surged with the exception of the Corporate market (-1.9%) which accounted for 19.2% of the business mix. Leisure and Tours/Groups represented almost equally 51.9% of the total number of rooms sold with rates climbing by 6.4% and 16.1% respectively. The Residential Conference segment accounted for 5.9% of the total demand and the associated rate went up by 15.2%. TRevPAR also increased by 9.4% and with efficient cost control, GOPPAR rose by 25.0%.
Berlin and St Petersburg challenged
A 4.2 percentage point increase in occupancy was almost cancelled out by a 4.6% decline in ARR for Berlin hotels in August, leading to a positive RevPAR movement of only 0.3%. Negative performances were recorded in ancillary departments and TRevPAR levels dropped by 4.8%. With departmental operating profit per available room (DOPPAR) declining by 8.1%, payroll went up by 1.2 percentage points and despite overheads per available room going down by 1.3%, GOPPAR decreased by 17.0% compared to the same period last year.
St Petersburg hotels in August recorded negative year-on-year comparisons across all key performance indicators, confirming the unfavourable trend of 2014. With RevPAR and TRevPAR going down this month by 19.7% and 16.9% respectively, hoteliers were unable to adapt costs and as a result DOPPAR decreased by 22.6% and GOPPAR by 30.0%, which still represents a gross operating conversion of 39.1% for the month of August.
Surge in demand supported profit growth in Rome
Despite a drop of 4.8% in ARR, Rome hoteliers experienced a surge in demand of 8.0 percentage points, leading to a RevPAR uplift of 7.7% in August. With revenue per available room from food and beverage also increasing by 3.1% and 1.1% respectively, TRevPAR grew by 6.3%. Astute operating cost control further boosted DOPPAR levels by 7.6%, and was also underpinned by travel agents commission reducing by 10.3%. With payroll decreasing by 0.6 percentage points, GOPPAR shot up by 20.4% despite overheads per available room slightly increasing.
The hotels profiled in this report are drawn from the HotStats database and reflect the portfolios and distribution of the hotel chains that we survey and which operate primarily in the four and five-star sectors.
Please note: The data samples are reviewed and rebased each year to reflect the changes in the HotStats survey base. As a result, performance ratios published last year may differ from those contained within this report.
Occupancy (%) is that proportion of the bedrooms available during the period which are occupied during the period.
Average Room Rate (ARR) is the total bedroom revenue for the period divided by the total bedrooms occupied during the period.
Room RevPar (RevPAR) is the total bedroom revenue for the period divided by the total available rooms during the period.
Total RevPar (TRevPAR) is the combined total of all revenues divided by the total available rooms during the period.
Payroll % is the payroll for all hotels in the sample as a percentage of total revenue.
GOPPAR is the Total Gross Operating Profit for the period divided by the total available rooms during the period.
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