Hotels in Europe recorded a 3.6% increase in GOPPAR this month, with hotels in Budapest leading the way with a 27.1% year-on-year increase in profit per room, Profit growth at UK hotels unabated by election uncertainty.
A 0.4 percentage point year-on-year decline in room occupancy at hotels in Europe in June, to 78.7%, was more than offset by the 4.9% increase in achieved average room rate, to €180.04, fuelling a 4.4% increase in RevPAR.
In addition to the growth in Rooms Revenue, hotels in Europe recorded a 0.5% increase in Food and Beverage revenue, to €36.61 per available room, which contributed to the 2.9% increase in TrevPAR, to €208.84.
Profit & Loss Key Performance Indicators " Europe (in EUR)
June 2017 v June 2016
- RevPAR: +4.4% to €141.75
- TrevPAR: +2.9% to €208.84
- Payroll: - 0.1 pts to 29.6%
- GOPPAR: +3.6% to €85.55
The growth in top line performance, which was primarily driven through rate, was further supported by cost savings, which included a 0.1 percentage point reduction in Payroll to 29.6% of total revenue, and enabled hotels in Europe to record a 3.6% increase in GOPPAR, to €85.55.
The GOPPAR growth in June contributed to the year-to-date increase in profit per room of 8.2%, to €53.81. This is equivalent to a profit conversion of 32.4% of total revenue at hotels in Europe for H1 2017.
“Hotels in Europe have had a good first half of the year and consumer confidence will be buoyed with the IMF recently upgrading its 2017 growth projections for many EU countries, including France, Germany, Italy, and Spain, on the back of Q1 growth exceeding expectations,” said Pablo Alonso, CEO of HotStats.
One of the top performing hotel markets in Europe this month was Budapest, which recorded a 27.1% year-on-year increase in GOPPAR on the back of a 23.4% uplift in RevPAR. The growth in Rooms Revenue was primarily driven by a 17.6% increase in achieved average room rate, to €142.41, as occupancy hit 85.3%.
Whilst Budapest has experienced a significant uplift in leisure tourists to the city, this month growth was fuelled by business visitors, as the Hungarian capital continues to establish its profile as a destination for MICE. The strong commercial demand levels fuelled an uplift in rate in both the corporate (+25.9%) and residential conference (+13.0%) segments.
A reduction in Payroll levels, to just 21.5% of total revenue enabled hotels in Budapest to achieve a punchy profit conversion of 47.7% of total revenue for the month.
Profit & Loss Key Performance Indicators " Budapest (in EUR)
June 2017 v June 2016
- RevPAR: +23.4% to €121.51
- TrevPAR: +19.2% to €164.49
- Payroll: - 1.0 pts to 21.5%
- GOPPAR: +27.1% to €78.51
“Whilst a lack of supply and burgeoning demand levels has enabled hotels in Budapest to drive a 46% increase in RevPAR over the last 36 months, it is noteworthy that astute hoteliers have leveraged this into a 60% increase in GOPPAR during the same period,” added Pablo.
June was also a strong month of performance for hotels in Paris, which recorded an 8.1% increase in GOPPAR on the back of a 4.2% increase in TrevPAR. The year-on-year growth in profit per room this month was helped by the biennial Paris Air Show.
Further to the 40.7% year-on-year drop in GOPPAR in Paris in 2016, as a result of terrorist attacks, heavy flooding and strikes, hotels in the French capital are getting back on track, with the growth in June contributing to an 8.7% increase in profit per room for year-to-date 2017, to €60.65.
Profit & Loss Key Performance Indicators " Paris (in EUR)
June 2017 v June 2016
- RevPAR: +6.3% to €337.85
- TrevPAR: +4.2% to €484.25
- Payroll: - 0.9 pts to 37.9%
- GOPPAR: +8.1% to €161.75
Whilst hotels in Paris have clearly been forced to operate more efficiently as a result of the tough period of operation in 2016 and have effectively cut costs in a number of key departments, the highest payroll levels in Europe continue to challenge profit performance at hotels in the French capital, which were recorded at just 17.1% of total revenue for year-to-date 2017.
Profit Growth at UK Hotels Unabated by Election Uncertainty
GOPPAR at hotels in the UK increased by 5.4% this month, in spite of the heightened uncertainty across the country as the snap general election ended in yet another hung parliament, according to the latest worldwide poll of full-service hotels from HotStats.
The year-on-year growth in GOPPAR this month was fuelled by a 6.2% increase in RevPAR, as hotels in the UK recorded a 0.6 percentage point increase in room occupancy, to 82.7%, as well as a 5.4% year-on-year uplift in achieved average room rate, to £122.23.
In addition to the uplift in RevPAR, hotels in the UK recorded a 0.7% increase in Food and Beverage revenue, to £42.31 per available room, which contributed to the 4.5% increase in TrevPAR.
Profit & Loss Key Performance Indicators " Total UK (in GBP)
June 2017 v June 2016
- RevPAR: +6.2% to £101.05
- TrevPAR: +4.5% to £153.86
- Payroll: - 0.2 pts to 25.7%
- GOPPAR: +5.4% to £65.24
Cost savings, which included a 0.2 percentage point reduction in Payroll, to 25.7% of total revenue, enabled a high flow through from the top line to the bottom line and hotels in the UK subsequently achieved a 5.4% increase in GOPPAR, to £65.24.
“The UK hotel market would have been forgiven for stumbling a little in the messy aftermath of 8 June. However, the strong economic fundamentals of the UK remain and the hotel sector is buoyant, illustrated by the continued upward trajectory this month,” said Pablo Alonso, CEO of HotStats.
Hotels in London continued to perform strongly in June, with a 6.0% increase in GOPPAR for the month contributing to the 13.9% year-on-year profit per room increase for year-to-date 2017, to £75.15.
The potential impact on hotel performance from terrorist-related activity in the capital at the beginning of the month was more than offset by the 30,000-strong attendance at IFSEC International 2017 at ExCeL.
Furthermore, the capital continues to benefit from the drop in the value of Sterling following the Brexit vote this time last year, with both business and leisure visitors arriving in increasing numbers from major source markets such as North America and Europe.
Profit & Loss Key Performance Indicators " London (in GBP)
June 2017 v June 2016
- RevPAR: +6.3% to £144.46
- TrevPAR: +4.4% to £195.07
- Payroll: - 0.2 pts to 22.8%
- GOPPAR: +6.0% to £95.32
Despite declines in Food and Beverage (-1.9%) and Conference and Banqueting (-5.8%) revenue at hotels in London in June, a 6.3% increase in RevPAR supported a 4.4% increase in TrevPAR, to £195.07.
“UK hoteliers are currently enjoying the benefits of Brexit, which has fuelled a record number of overseas visitors to the UK. The high demand levels have enabled room rates to be leveraged in the Individual Leisure, Group Leisure and Best Available Rate segments, with the rate premium flowing through to profit. This is great news for hotel owners and operators across the UK,” added Pablo.
Cardiff hotels were amongst the best performing in the UK in June, after hosting another highly successful major event. GOPPAR soared by 34.6% year-on-year this month as the 2017 Champions League Final between Juventus and Real Madrid took place in the Millennium Stadium.
In addition to the 21.6% uplift in Rooms Revenue, the high volume of visitors to the Welsh capital fuelled an 18.6% increase in TrevPAR, to £132.82, with significant increases recorded in non-rooms revenues, including Food (+11.3%) and Beverage (+11.8%).
Profit & Loss Key Performance Indicators " Cardiff (in GBP)
June 2017 v June 2016
- RevPAR: +21.6% to £82.61
- TrevPAR: +18.6% to £132.82
- Payroll: - 2.4pts to 26.5%
- GOPPAR: +34.6% to £51.43
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