UK provinces outpace London hotel growth

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Latest monthly figures from market intelligence company HotStats show that London hotels reported a slight increase in gross operating profit per available room (GOPPAR).

According to the report, the UK provinces continued to show much more positive year-on-year movements with Eastern hoteliers in the lead recording a 27.7% surge during November 2014.

Hotels in the East of the country achieved a combined uplift in occupancy of 3.4 percentage points and an average room rate (ARR) of 7.3% resulted in an impressive increase of 12.5% in revenue per available room (RevPAR) to £51.58.

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However, mixed performances were recorded with non-rooms revenues softening total revenue per available room (TRevPAR) levels to a growth of 7.7% to £89.52.

This increase in revenue performance was further enhanced by effective payroll management and efficient operating cost control with departmental operating profit per available room (DOPPAR) climbing by 14.4% to £49.65. Although overheads per available room rose by 3.5%, profit conversion went up from 23.5% to 27.9% delivering this impressive GOPPAR growth.

According to the November research from HotStats, Belfast hotels demonstrated once again that RevPAR alone can be a misleading indicator of hotel health with a decline of 1.1% in this metric, as TRevPAR and GOPPAR levels went up by 1.3% and 0.5% respectively.

A drop in demand of 2.8 percentage points with a 2.3% increase in ARR accounted for the RevPAR decline. However, an increase in non-rooms revenue per available room from C&B room hire (+36.9%), food (+8.4%) and golf (+3.0%) led to a TRevPAR growth of 1.3% to £90.58.

While hoteliers also suffered from a 1.9 percentage point increase in payroll, a 3.6% decrease in overheads per available room helped to achieve a slight increase in GOPPAR of 0.5% to £26.70 compared to the same period last year.

HotStats’ data showed that profits plummeted in Derby. While hoteliers experienced an increase in revenues with both RevPAR and TRevPAR going up by 7.1% and 11.6 % respectively, this increase was not sufficient to deliver a profit growth in November, as GOPPAR declined by 33.2%.

The RevPAR performance was achieved through combined rises in occupancy of 2.8 percentage points to 70.5% and in ARR of 7.1% to £62.51. A general decrease in non-rooms revenue per available room from leisure (-6.6%), food (-5.8%) and beverage (-5.6%) softened TRevPAR to £81.39, representing only a 1.4% increase compared to the same period last year.

In contrast, operating costs grew and negated the revenue increases, leading to a 1.4% decrease in DOPPAR. A significant 41.0% surge in overheads per available room further impacted profitability levels resulting in a GOPPAR decline of 33.2% to £13.88.

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