Hoteliers outside London chase biggest profits


The UK ‘provinces’ are once again leading the way to profit growth, with latest figures revealing positive growth in gross operating profit per available room (GOPPAR) throughout the country.

West Midlands hoteliers experienced a 4.7% increase in this metric while London hoteliers registered a decline, according to May data published by research specialist HotStats.

West Midlands hotels recorded surges in occupancy of 1 percentage point to 69.5% and in average room rate (ARR) of 2.5% to £72.03, leading to a rooms revenue per available room (RevPAR) growth of 4% to £50.09.

Story continues below

A closer look into the rooms department shows a 19.2% increase to £5.03 in travel agency commission per available room compared to the same period last year. This means that of the £1.95 gain in RevPAR, £0.81 or 41.5% of the increase was paid away to third party intermediaries.

But mixed performances were recorded in ancillary departments and total revenue per available room (TRevPAR) levels were softened to a rise of 2.8% to £102.05.

At the same time, hoteliers managed to reduce payroll to 31.8% from 32.5%, and as a result departmental profit per available room (DOPPAR) went up by 3.0%. Despite overheads per available room increasing by 1.0%, GOPPAR hiked by 4.7% to £31.07.

In May, notwithstanding a 6.5% increase in RevPAR, Brighton hotels suffered a decline in GOPPAR levels of 6.4%, according to the latest data from HotStats.

A surge in demand of 3.7 percentage points with a 1.5% increase in ARR delivered the RevPAR growth compared to the same period last year. However, a general decrease in non-rooms revenue per available room from meeting room hire (-26.2%), food (-5.8%) and beverage (-2.3%) led TRevPAR levels to rise by only 0.9% to £123.11.

Hoteliers’ payroll costs increased by 0.9 percentage points, and a 12.8% surge in overheads per available room further impacted the GOPPAR decline of 6.4% to £46.05, representing a gross operating profit conversion of 37.4% for the month.

Elsewhere, Nottingham hoteliers experienced an uplift in revenues with both RevPAR and TRevPAR going up by 2.8% and 2.6% respectively. However, this increase did not translate into the bottom-line performance during the month of May, as GOPPAR remained stable at £23.00.

Hotels in the city recorded a growth in ARR of 4.4% at the expense of occupancy going down by 1.0 percentage points, resulting in RevPAR jumping to £43.25. Mixed performances in ancillary departments contributed to a TRevPAR rise of 2.6% to £77.89 compared to the same period last year.

On the other hand, payroll costs grew by 1.0 percentage point and negated the revenue increases, and a 2.2% surge in overheads per available room further impacted profitability levels resulting in GOPPAR stagnating for the month.


Related posts