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UK chain hotels market review - March 2014.
Thursday, 24th April 2014
Source : HotStats

In March, the UK hotel market continued its solid start to the year with South West hoteliers registering a 4.9% increase in total revenues per available room (TRevPAR), and a 6.2% surge in gross operating profit per available room (GOPPAR).

A significant 6.0% increase in average room rate (ARR) and a slight uplift in occupancy (+0.4 pts) led revenue per available room (RevPAR) to rise by 6.5%.

Besides the rooms department, food and meeting room hire were the other revenue drivers contributing to a 4.9% surge in TRevPAR, representing an impressive series of 18 consecutive months of year-on-on year increases for this metric.

Astute payroll and operating cost control helped to enhance departmental operating profit per available room (DOPPAR) by 5.4% to £48.82 and although overheads per available room jumped by 4.5%, GOPPAR rose by 6.2%. 

When looking at the first quarter of 2014, South West hotels posted strong results across all key performance indicators and comtributed to the positive dynamics of the rolling twelve month data for this region.

Cardiff still challenged

Despite an uplift of 0.9% in RevPAR in March for Cardiff hotels, both TRevPAR and GOPPAR showed year-on-year negative movements by 0.7% and 7.8% respectively, according to the latest data from HotStats.

With ARR slightly decreasing, RevPAR growth was fuelled by a 0.9 percentage point increase in occupancy. But mixed performances were recorded in non-rooms revenues, and TRevPAR decreased by 0.7% to £105.11.

Rising payroll, operating costs and overheads further eroded profit conversion, by 2.2 percentage points to 30.7%, and as result GOPPAR fell by 7.8% to £31.06, showing once again the importance of analysing operating performance beyond RevPAR.

On a more positive note, and looking at the first quarter performance, March’s downturn was not enough to offset the good start to the year with hoteliers achieving growth both in TRevPAR (+4.6%) and GOPPAR (+7.3%).

Newcastle shaping up

Hotels in Newcastle experienced year-on-year increases across all key performance indicators in March with TRevPAR and GOPPAR growing by 6.9% and 6.5% respectively, according to the latest data from HotStats.

RevPAR growth of 4.3% was facilitated by a combination of increased occupancy (+1.4 pts) and rising ARR (+2.3%). With revenue per available room derived from food (+11.8%), beverage (+15.6%) and meeting room hire (+24.8%) increasing notably, TRevPAR grew by 6.9% to £95.06. Despite overheads per available room going up by 5.1%, efficient operating cost control and payroll management helped to deliver a GOPPAR growth of 6.5% to £26.30.

Even though the month of March and the first quarter demonstrate cumulative positive trends across most performance metrics, the rolling twelve month data reveals Newcastle still has some ground to recover  with TRevPAR and GOPPAR being diminished by 1.1% and 5.6% respectively.

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