Following the 12.4% increase in profit per room in 2011, Amsterdam hoteliers recorded a second consecutive month of profit decline for the new year, as the city suffered decreases across all headline performance measures during February.

Whilst the 13.7% decline in profit per room in February was primarily led by a 6.7% decrease in Total Revenue per Available Room (TrevPAR) as the market suffered declines in rooms revenue (-5.9%), food and beverage revenue (-6.3%) and meeting room hire revenue (-1.8%) per available room, profitability levels at hotels in the Dutch city were also impacted by rising costs.

In contrast to a number of the European cities polled this month, hotels in Amsterdam appear, for now, to be less reliant on demand created by third party online travel agents, such as booking.com, lastminute.com and laterooms.com, with costs in this sector declining by 11.8% for the month to €4.17 per room sold, equivalent to 2.7% of rooms revenue.

This is against increases in this cost in Budapest (+45%), London (+13.8%) and Warsaw (+35.7%) as the revenue benefits of global exposure provided by these websites is perceived to outweigh the overall cost.

However, in addition to a 0.7 percentage point increase in payroll levels to 42.6 per cent of total revenue, hotels in Amsterdam suffered increases in sales and marketing expenses (+1.9%) and utilities (+23.1%) to €4.80 per available room. The increasing cost of utilities in February has also been recorded in Berlin (+3.1%), Paris (+13.8%) and Warsaw (+12.3%) on a per available room basis. 

"After two consecutive strong years of headline performance growth in Amsterdam in 2010 and 2011, the city has started poorly in 2012. Whether this is as a result of the dilution of room occupancy in the city due to the addition of new hotel stock, such as the 553-bedroom Mint Hotel, now Doubletree by Hilton, or as a result of the extreme weather conditions in February, which caused the historic canal system to freeze, will only become clear as we progress through the year," said Jonathan Langston, managing director, TRI Hospitality Consulting. 

As a result of the 13.7% decline this month to €29.27, in the first two months of 2012, hotels in Amsterdam have suffered a profit decrease of -7.8%, which is compared to the strong start in 2011, during which year-on-year profit levels increased by 33.8%.

Mixed performance for European hoteliers as the big freeze grips the continent

Despite a number of the cities polled this month achieving strong increases in profit per room during February, the big freeze contributed to significant declines in a number of Europe's premier hotel markets, according to the latest HotStats survey. 

On a positive note, there was growth in profit per room for Berlin (+16%) and Paris (+33.3%) with Warsaw achieving the greatest margin of growth at 73.3%.

Whilst Paris benefited from the return of the biennial Interclima convention, which attracts in excess of 100,000 delegates and fuelled an 11.3% increase in average room rate to €187.71, the highest rate achieved of the European cities polled in February; Warsaw has had a strong start to a year in which it hopes that the UEFA European Championships will increase the tourism profile of the city and the nation.

Whilst temperatures in the Polish capital plummeted to -40oC, hotels in the city were able to successfully increase Revenue per Available Room (RevPAR) levels by 19% to €60.88; with growth also achieved in food and beverage (+38.6%), meeting room hire revenue (+38.2%) and leisure revenue (+41.2%).

The RevPAR growth in the city may be in part attributed to a 17.9% increase in the ‘Best Available Rate' segment in the city, which is typically attributed to major events, and is reflective of the city's EXPO XXI convention centre hosting the Coal-Gen Europe Conference for the first time.

The TrevPAR increase in Warsaw contributed to a 73.3% increase in profit per room as payroll levels dropped by 6.5 percentage points to just 26.9% of total revenue. Costs savings were also made in food (-4.6 percentage points) and beverage (-1.0 percentage points) cost of sales as a proportion of departmental revenue, as well as sales and marketing (-0.9 percentage points) and utility costs (-0.6 percentage points) as a proportion of total revenue. 

In contrast, significant profit per room declines were suffered in Budapest (-13.5%), Stockholm (-15.9%) and Rome, which recorded a 133.8% decline in profit per room to -€8.93 from -€3.82 during the same period in 2011.

The 3.2% drop in RevPAR in Rome understated the negative performance in the Italian capital, with a 1.9 percentage point increase contributing to a payroll level of more than 60% of total revenue. Cost increases on a per room sold basis were also suffered in Rooms Direct Expenses (+1.2%), Maintenance Expenses (+20.1%) as well as a 50.4% increase in utility expenses.