HotStats European Chain Hotels Market Review – February 2014
RevPAR growth flatters to deceive in Brussels and St Petersburg
Whilst both cities increased revenue per available room (RevPAR) in February by 1.1% and 3.0% respectively profit per available room fell in both markets, according the latest data from HotStats.
Average Room Rate (ARR) in Brussels’s hotels remained virtually flat and the RevPAR uplift was driven by a rise in occupancy (+0.8 percentage points). Growth was also recorded in non-rooms revenues and total revenue per available room (TRevPAR) grew by 1.9% to €118.22. However, a 3.7 percentage point payroll increase and rising operating costs eroded departmental operating profit per available room (DOPPAR), decreasing by 2.6% to €55.34. This was compounded by a 6.3% escalation in overheads per available room, leading to a 14.3% fall in gross operating profit per available room (GOPPAR).
In February, St Petersburg hoteliers posted a 3.0% growth in RevPAR despite a 0.9 percentage point drop in occupancy thanks to ARR increasing by 4.9%. But negative performance in ancillary revenues softened TRevPAR growth to 2.0% to €69.49. A 3.2 percentage point increase in payroll contributed to a DOPPAR and GOPPAR reduction of 5.6% to €36.92 and 13.7% to €12.66 respectively.
Cologne and Zurich registered revenue and profit growth
Cologne hotels experienced a 2.3 percentage point increase in occupancy and rising rates across all segments, most notably from Best Available Rate (+13.8%), Corporate (+11.3%) and Leisure (+7.0%), led to an overall ARR increase of 8.4%. As a result, RevPAR increased by 12.2% to €76.60. Despite a significant drop in meeting room hire per available room (-21.0%), revenues from food (+3.8%) and beverage (+16.1%) helped to lift TRevPAR by 8.8% to €112.46. Furthermore operational cost control and efficient payroll management delivered an increase in GOPPAR of 15.3% to €36.05, despite overheads rising by 6.2%.
In February, Zurich hotels also increased occupancy by 5.3 percentage points but at the expense of ARR, declining by 4.1%, and as a result RevPAR grew by 3.5%. Closer examination of the market segmentation showed rate diminution in the Best Available Rate (-13.1%) and Corporate (-6.5%) sectors, while the Residential Conference and Leisure sectors increased by 3.4% and 3.9% respectively. The gain in TRevPAR of 4.3% was further boosted by C&B productivity with meeting room hire revenue per square meter up by 7.5%. In the meantime, hoteliers managed to control operating costs and payroll as well as to reduce overheads by 3.0% delivering a GOPPAR increase of 12.1% to €41.11.
Poor trading performance for Munich
In February, hotels in Munich suffered from a combined drop in occupancy (-2.5 percentage points) and ARR (-7.2%) resulting in RevPAR falling by 10.5%. With other sources of revenue also decreasing, TRevPAR fell by 10.2% to €118.33. A 5.6 percentage point increase in payroll adversely impacted DOPPAR by 18.0%, further exacerbated by rooms and F&B margins deteriorating by 2.5 percentage points to 65.4% and 9.6 percentage points to 9.0% respectively. Despite overheads remaining stable, GOPPAR fell sharply by 34.9% to €23.84 representing a profit conversion of 20.1% down from 27.8%.
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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