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European chain hotels market review: Brussels and Frankfurt forge ahead.
Thursday, 3rd July 2014
Source : HotStats

Both Brussels and Frankfurt achieved impressive surges in gross operating profit per available room (GOPPAR) in May of 45.5% and 36.9% respectively thanks to excellent cost control, according to the latest data from HotStats.

May was the best month of the year for the Belgian capital with increases in average room rate (ARR) of 12.2% and occupancy of 3.0 percentage points, leading to a RevPAR growth of 16.7% to €105.34. Total revenue per available room (TRevPAR) levels (+15.2% to €149.46) were also fuelled by non-rooms revenues.

Astute operating cost control and payroll declining by 4.8 percentage points further improved the performance. Profitability of rooms and food and beverage operations increased by 4.9 percentage points to 66.7% and 4.3 percentage points to 21.6%, respectively. As a result, departmental operating profit per available room (DOPPAR) jumped by 26.5% and despite overheads per available room increasing (+4.8%), GOPPAR surged by 45.5%.

In May, Frankfurt hotels also experienced a double digit increase in RevPAR (+10.2%) driven by a 6.0 percentage point leap in occupancy. Non-rooms departments further enhanced TRevPAR growth of 16.4% with increases per available room from food (+23.7%), beverage (+23.3%) and meeting room hire (+58.9%).

Proficient operating cost control underpinned by a food and beverage operations’ profit increase of 10.6 percentage points to 29.9% contributed to a 20.6% uplift in DOPPAR. Payroll declined by 1.9 percentage points and although overheads went up by 2.6%, GOPPAR rose by 36.9%.

Amsterdam and Prague push profits up

Despite reaching occupancy of 88.5% in May, Amsterdam registered a 0.9 percentage point drop in demand, but hoteliers improved ARR by 13.2% and grew RevPAR by 12.1%. Positive performances were recorded in ancillary departments to generate a TRevPAR uplift of 10.7%.

Efficient operating cost control helped to enhance DOPPAR by 13.7%, representing a departmental profit conversion of 65.0%. Overheads per available room showed a negative movement of 1.7% but with payroll decreasing by 2.0 percentage points, GOPPAR soared by 18.3%.

In April, Prague also suffered from a drop in demand with occupancy decreasing by 1.9 percentage points but hoteliers managed to increase ARR by 5.1% and RevPAR grew by 2.7%.

Mixed performances were recorded in non-rooms revenues per available room with food decreasing by 2.4% or meeting room hire increasing by 13.7%, leading to a TRevPAR rise of 2.4%. With payroll remaining stable, cost control helped to increase DOPPAR by 3.8% and with overheads also decreasing, GOPPAR rose by 9.2%

Istanbul still challenged

Istanbul registered negative year-on-year comparisons across all key performance indicators for the month of May. Both occupancy and ARR declined by 9.1 percentage points and 7.0% respectively to deliver a RevPAR drop of 17.5%.

A general decrease in non-rooms revenues led to a TRevPAR fall of 14.4% and DOPPAR went down by 16.8%. Despite overheads per available room decreasing by 4.9%, payroll climbed by 3.1 percentage points and contributed to a GOPPAR decline of 21.6%.

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