Both Milan and Prague achieved impressive year-on-year surges in gross operating profit per available room (GOPPAR) by 37.5% and 22.6% respectively; 

In the month of October, Milan hotels managed to increase average room rate (ARR) by 16.2% but at the expense of occupancy, which surged only by 0.9 percentage points, resulting in a rooms revenue per available room (RevPAR) rise of 17.4%.

Additional increases were reported in revenues per available room derived from meeting room hire (+114.5%), food (+16.9%) and beverage (+15.8%), which further boosted total revenue per available room (TRevPAR) levels by 19.8%. Astute operating cost control and a significant decrease in payroll (-3.8 percentage points) resulted in departmental operating profit per available room (DOPPAR) surging by 28.1%.

Overheads per available room climbed by 15.8% mostly due to sales and marketing expenses increasing by 81.0%, but that was not enough to temper the GOPPAR growth of 37.5%.

Hotels in the Czech capital simultaneously increased occupancy (+5.1 percentage points) and average room rate (+11.0%) to produce a RevPAR growth of 18.3% compared to the same period last year.

A general increase in other revenue streams further boosted TRevPAR by 13.4% to €129.21. Hoteliers also increased DOPPAR by 16.7% thanks to proficient cost control and a 1.8 percentage point increase in rooms profit conversion to 77.7%.

Despite overheads per available room rising (+3.9%), payroll slightly decreased (-1.2 percentage points) and GOPPAR went up by 22.6%, representing a profit conversion of 49.1% for the month of October.

…While Cologne and Dusseldorf challenged

Cologne registered negative year-on-year comparisons across all key performance indicators for the month of October.

Both occupancy and ARR declined by 7.7 percentage points and 31.5% respectively to deliver a RevPAR drop of 38.1%. A closer look into the rooms department shows a significant 25.5% increase in travel agent commission per occupied room compared to the same period last year.

Similar movements in non-rooms revenues did not help the poor performance and TRevPAR decreased by 31.3%. With payroll going up by a noteworthy 7.3 percentage points, DOPPAR declined by 39.7% to €76.09 thereby contributing to a GOPPAR decline of 45.4% to €51.36.

In October, Dusseldorf hoteliers also suffered from a combined decrease in occupancy (-1.9 percentage points) and ARR (-22.4%), resulting in a RevPAR drop of 24.4%.

However, positive movements in non-rooms departments softened the TRevPAR decline of 18.8%. With payroll rising by 6.7 percentage points, DOPPAR decreased by 25.7% to €112.62, and GOPPAR fell by 32.1% to €77.80.

When looking at the profit conversion rate, hoteliers still managed to close the month with 43.6%, which represents an 8.5 percentage point decrease compared to October 2013.

RevPAR up but profits down in Warsaw

Hotels in Warsaw demonstrated once again that RevPAR alone can be a misleading indicator of hotel performance with a rise of 1.2% this October, as both TRevPAR and GOPPAR levels went down by 1.6% and 2.0% respectively.

A 2.6 percentage point drop in demand in contrast to a 4.3% increase in ARR delivered the RevPAR growth. However, a general decrease in non-rooms revenue per available room from beverage (-8.2%), food (-6.2%) and meeting room hire (-0.1%) led to a TRevPAR drop of 1.6% to €136.73.

A 0.2 percentage point increase in payroll, mostly fuelled by the F&B department (+1.8 percentage points) of the properties, contributed to a DOPPAR and GOPPAR reduction of 2.1% to €91.56 and of 2.0% to €66.54 respectively.