A year-on-year increase in Revenue per Available Room (RevPAR) of 15.8% in the month of June has led to a 14.9% increase in Gross Operating Profit per Available Room (GOPPAR) at London hotels. The strong RevPAR growth in London was led by an exceptional increase in achieved average room rate of 11.2%, to £131.23.
The lingering memory for travellers caught up in the airport closures earlier this spring because of the eruption of the Icelandic volcano, Eyjafjallajokull, will be of days wasted at airports or meetings and holidays cancelled. For hoteliers in London and the city’s two major airports, Heathrow and Gatwick, the closures had no significant effect on the long-term trend toward growth in revenue per available room (RevPAR), according to data from STR Global, the leading provider of market information to the global hotel industry. See the trend lines in the graph below.
This market snapshot is part of a series of articles that HVS is producing every month on a series of key markets with STR Global data for each key market. Our analysis is based on data for a sample of more than 7,500 rooms.
After a somewhat gloomy April, the French hotel industry picked up in May. All categories in Paris and throughout France experienced increasing RevPAR, with one exception: 4 star hotels on the Cote d’Azur, whose rooms revenue stagnated.
Last month’s warning unfortunately became reality: April did not mark the end of the recession and March’s sunny spell didn’t last long. Rooms revenue stagnated in the 3 and 4 star sectors and deteriorated somewhat in the 2 star category. These results were all the more disappointing when considered against 2009 – a year where RevPAR dropped sharply. The budget sector (0 and 1 star) continued to stand out from the crowd, with an overall growth in activity. Only those hotels located in Ile-de-France experienced a decline in occupancy (-3%).
This newsletter provides a snapshot of the performance of Greek hotels based on a sample of more than 180 hotels & resorts in Greece. This data is complemented by data from other sources so as to place the Greek hospitality industry in the perspective of Greek tourism and of the International Hospitality Industry. Finally, a topic of special importance to the hospitality industry will be presented each time.
Following five months of consecutive year-on-year profitability growth, international travel disruption caused by the Eyjafjallajoekull volcano ended London’s near perfect 2010 performance, according to the latest HotStats survey from TRI Hospitality Consulting. The 2.5% decline in Gross Operating Profit per Available Room (GOPPAR) was primarily led by a decline in Revenue per Available Room (RevPAR) in the capital for the first time since October 2009.
In regional 2 star hotels, although average rates remained constant the category was heavily impacted by a drop in demand. A number of large cities saw 2 star hotel occupancy decline by over 10% in February. In Ile-de-France, the positive results recorded in Paris were not necessarily experienced elsewhere in the region, since most departments saw occupancy and ARR fall. Declines ranged from 5% in Essonne to over 30% in Seine-Saint-Denis.
Hoteliers in London could see double-digit revenue per available room (RevPAR) growth this year, according to the latest Hotel Market Outlook, a quarterly report issued by Deloitte.
2009 was one of the toughest years yet for the hotels sector with a RevPAR decline of almost 10%, but green shoots are emerging. Our latest UK hotels forecast 2010-2011: On the comeback trail predicts growth of over 3% this year and nearly 5% in 2011, with London storming ahead of the Provinces.
There was no miracle for the French hotel industry at the beginning of 2010 and the certain markets continued to suffer. Market drops were significant, since data were compared against January 2009 – a month already affected by the downturn. The crisis did not even spare the budget sector in January (a sector that has to date performed in spite of the slump): whilst average rates remained acceptable, occupancy dropped, resulting in RevPAR declines of 2% in the North-East and South-East and up to 6% in the South-West.
“Our research indicates that there is a close relationship between movements in rooms revenue performance and total revenue performance for both UK provincial and London hotels. However, our analysis also indicates that London hoteliers have the ability to adjust fixed costs more quickly in response to changes in revenue performance, whereas provincial hotels have been less able to mitigate falls in revenue with cost reduction” said Jonathan Langston, managing director, TRI Hospitality Consulting.
Confidence amongst hotel general managers suffered a slight setback in Q1 2010 as the new year produced a mixed outlook across the UK. Our Q1 2010 Confidence Monitor results revealed a small increase in the proportion of negative respondents at the expense of positive respondents compared with Q4 2009, with a 3.5% increase in the number of general managers surveyed who were not certain about what the next three months would bring.
It comes as no surprise that 2009 was a very bad year for the French hotel industry – even worse than 2003. As is the case during any economic crisis, 4 star hotels were the most severely impacted, business volatility being particularly pronounced in this market; the market does well during growth periods but suffers to a greater extent during economic downturns. Conversely, the decline in occupancy observed in the 0 to 2 star sectors was softened (or even offset in the budget sector) by a rise in average rates.
The recent freeze across the U.K. brought with it contrasting fortunes for hotel operators. Daily data from STR Global, the leading provider of market data to the world’s hotel industry, showed recent adverse weather and road conditions reduced people’s desire to travel locally. Guests were forced either to cancel their plans to travel or to stay in hotels as airports were closed.
Deloitte, the business advisory firm, has confirmed that hotels in London saw revenue per available room (revPAR) rise out of the red during the final quarter of 2009, up 5.5% to £110. Occupancy was the key driver of growth in the capital, up 5.8% to an outstanding 82.9%. Average room rates, which lag occupancy in recovery, fell 0.2% to £133.
A brighter spell for Parisian hotels. Parisian hotels picked up somewhat during November. With the exception of 3 star standard hotels, all categories recorded a rise in demand. However, it should be noted that these results are compared against November 2008 when activity had sharply declined. This trend was, unfortunately, not mirrored throughout France. Rooms revenue in the regions and on the Côte d’Azur was still in significant decline.
Deloitte, the business advisory firm, has confirmed that London’s hotel market is leading the recovery in European hotel performance after 13 consecutive months of decline. October showed the first signs of revPAR (revenue per available room) growth but data for November shows a dramatic increase in hoteliers’ revenue, rising 10% compared to the same month last year.
Despite a global industry downturn, Stockholm’s hotel market has experienced only a moderate occupancy decline for the year through October, according to STR Global, the leading provider of market data to the world’s hotel industry. “Compared with the previous year, the overall decline of 4.5 percent has not been as bad as expected”, said Elizabeth Randall, managing director of STR Global. “The summer months of 2009 actually saw occupancy rise in Stockholm compared with the previous year”.
With a year-on-year increase of 1.5 percentage points in October 2009, to 85.1%, the London hotel market recorded the second highest occupancy performance for the capital in 2009, according to the latest HotStats survey by industry experts TRI Hospitality Consulting.