Paris tops the table on revpar but Moscow is Europe's profit leader.

Hotels in Paris had the best room revenue per available room in TRI Hospitality's HotStats sample of 10 cities on the continent of Europe. But it is in the Russian capital Moscow where hoteliers are making the most money.

Revpar in Paris moved ahead of London in the last few months of the first half of this year to leave it at €143.26 compared to London's €141.42. The difference between these two cities is more pronounced, however, when it comes to how much of this revenue is converted into profit. In London, income before fixed charges per available room is €91.95, well ahead of the €69.44 achieved in Paris. Only Moscow is in three figures for profit with an IBFC of €130.38. "While
Paris tops the sales charts its more expensive operating environment makes converting this to the bottom line more of a challenge than in more flexible business environments such as Russia or the UK," said Jonathan Langston, managing director of TRI Hospitality Consulting.

Revpar in Moscow only puts it in fourth place in the survey, despite topping the chart with an average rate of €188.66. This is due to its weak occupancy of 66.7 per cent, the lowest in the survey.

London's performance, on the other hand, is more rounded with the second best occupancy of 80.4 per cent, just behind the 80.6 per cent in Amsterdam, and the third best rate at €175.99, behind Moscow and Paris. A key reason for the difference in profitability is wage costs. Moscow had the lowest wage costs with payroll representing just 20.3 per cent of turnover. In Paris by contrast, payroll represents almost twice as much turnover coming in at 40.0 per cent making it second from bottom on this count.

London's profitability is boosted by having the third best payroll percentage. Prague, which has the second best payroll percentage, still comes in at only fifth place in terms of profitability thanks to a comparatively weak sales performance with €92.49 revpar leaving it in seventh place on this basis.

"Making money in the hotel business, like any other, depends on balancing revenues with costs. The sales strength in Paris is outweighed by the lower cost environment in Moscow," said Langston.

Germany benefits from World Cup but still lags
The strongest growth in revpar was seen in Berlin where it rose 71.4 per cent in the month of June, thanks of course to the soccer World Cup. This strong result in the German capital almost doubled profits for hoteliers there with a 96.6 per cent rise in IBFC.

Other German cities also benefited with revpar in Hamburg up 47.6 per cent and revpar in Munich up 13.7 per cent. The respective increases in profits were 63.1 per cent and 22.5 per cent. The result in Munich was perhaps disappointing and reflects a substantial 13.9 percentage point drop in occupancy during the month to make it the least occupied city out of the 10 during June.

Despite the World Cup boost, hotels in Moscow were more than twice as profitable as those in Berlin during June. The three German cities were still firmly in the bottom half of the profitability league, even with the extra business generated by the soccer jamboree.

Paris was the only city in the survey to put in a fall in revpar during the month, dropping by 0.5 percent. Outside of Germany, Amsterdam was particularly strong with a 28.2 per cent rise in revpar. "While Germany has been given a one-off boost by hosting the World Cup its challenge remains in achieving the long-term profitability enjoyed elsewhere in Western Europe," said Langston.

For more information contact Jonathan Langston on +44 (0)20 7486 5191 or email jonathan.langston@trihc.com.