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European chain hotels market review.
Wednesday, 30th July 2014
Source : HotStats
Happy days for Barcelona and Milan: Both cities recorded growth in gross operating profit per available room (GOPPAR) of 8.5% and 4.1% respectively in June, confirming the first semester and the rolling 12 months to June profit surges.

In the month of June, Barcelona hotels managed to increase average room rate (ARR) by 8.8% but at the expense of occupancy, which declined by 4.6 percentage points, delivering a RevPAR rise of 3.3%.

Additional increases were reported in revenues per available room derived from meeting room hire (+40.4%), beverage (+9.3%) and food (+5.2%), which further boosted TRevPAR levels by 6.4%.

Astute operating cost control enhanced departmental operating profit per available room (DOPPAR) by 8.3% despite a 1.7 percentage point increase in payroll. Overheads per available room climbed by 7.7% mostly due to sales and marketing costs increasing by 32.3% but that was not enough to temper the GOPPAR growth of 8.5%.

Hotels in Milan increased RevPAR by 2.9% driven by a 2.6 percentage point rise in demand in June. Mixed performances were registered in ancillary departments leading to a TRevPAR growth of 2.0%.

A 3.9 percentage point increase in food and beverage profit conversion to 26.3% contributed to the DOPPAR uplift of 2.9%. Despite overheads per available room rising (+1.3%), payroll remained virtually flat and GOPPAR increased by 4.1%, representing a profit conversion of 33.0% for the month of June.

June’s blip for Cologne and Dusseldorf

Cologne hoteliers were hit by a major slowdown in June with negative year-on-year comparisons across all key performance indicators. Both occupancy and ARR declined, by 5.4 percentage points and 2.3% respectively, leading to a RevPAR fall of 9.6%.

A general decrease in revenue from other departments further impacted TRevPAR levels (-12.6%) and rising operating costs resulted in a DOPPAR reduction of 19.9%.

Despite overheads declining, payroll increased by 4.4 percentage points contributing to deliver the GOPPAR drop of 29.0%.

On-going strong performances from Dusseldorf hoteliers since the beginning of the year were halted in June, with the city also experiencing negative year-on-year movements across all key performance indicators.

A combined decrease in occupancy (-0.3 percentage points) and ARR (-1.2%) resulted in a RevPAR drop of 1.7%. However, positive movements in non-rooms departments softened the TRevPAR decline of 1.1%.

Despite overheads per available room remaining flat, rising operating costs and payroll negatively impacted DOPPAR by 5.7% and GOPPAR by 8.9%.

Flat revenue but profit growth for Warsaw

In June, Warsaw hotels recorded a 1.0 percentage point increase in occupancy which was cancelled out by a drop of 1.3% in ARR, and as a result RevPAR remained almost unchanged (-0.1%).

Mixed revenue performances per available room derived from food (+4.6%), beverage (+0.4%) and meeting room hire (-20.3%) maintained TRevPAR at the same level (+0.1%) compared to the same period last year.

However, proficient cost control and payroll management generated gains in DOPPAR and GOPPAR by 0.3% and 1.7% respectively.

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