Industry Update
Press Release26 June 2013

HotStats European Chain Hotels Market Review - May 2013

Moscow and Prague Case Study: the RevPar, TrevPar and GOPPAR perspective

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TRI Hospitality Consulting

This month, as part of our tracking of the full picture of European hotel performance we focus on Moscow and Prague. At first sight, the two cities recorded differing performance trends in May, according to the latest HotStats survey: while Moscow performance looks negative with revenue per available room (RevPar) decreasing 1.4%, Prague manages to increase RevPar by 7.2%. However, as is increasingly the case with RevPAR as a performance measure, this first impression is misleading when taking account of total revenue generation and profitability performance.

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Food, beverage and meeting room revenues growth compensates for the decrease in rooms performance in Moscow and pushes total revenues per available room (TrevPar) up 1.1%. Considerable reductions in rooms expenses of -58% per room sold helped to improve rooms profit conversion by 4.4 percentage points. Similarly astute cost management in the F&B department achieved an enhancement of F&B profit conversion of 8.5 percentage points to 45.3%. The combination of non-rooms revenue growth and focus on cost efficiency delivered a positive result for Moscow hoteliers with a growth in gross operating profit per available room (GOPPAR) of 12.3% in May.

When put in the context of the rolling 12 months, May performance contributed to a successful period with a profit per room of €79.08, a rise of 12.7% from €70.14 in the previous period.

Hoteliers in Prague faced a different situation. RevPar was driven by a simultaneous increase in occupancy of 3.7 percentage points to 83.4% (the second highest figure in this month’s European chain hotels market review) and in ARR of 2.4%, with a notable tours and groups rate rise. Higher rates for the residential conference segment however caused a decline in volume of over 40% in this segment, which consequently affected revenues coming from food (-11.8%), beverages (-26.5%) and meeting room hire (-41.5%). These declines are responsible for the shift from RevPar growth to TrevPar decrease of 3.9% in May and, combined with a slight increase in overhead expenses as a percentage of total revenues caused GOPPAR to shrink by 1.6% to €54.68.

Meanwhile, in the German capital a positive moderate profit growth figure of 1% in May contributed to a surge in GOPPAR of 17.6% in this calendar year to date. Rising revenues from food and beverage sales in hotel bars, a stable payroll and a combination of other beneficial factors were able to offset the rise in expenses for travel agent commission in 2013 and boost the bottom line.

The hotels profiled in this report are drawn from the HotStats database and reflect the portfolios and distribution of the hotel chains that we survey and which operate primarily in the four and five-star sectors.

Please note: The data samples are reviewed and rebased each year to reflect the changes in the HotStats survey base. As a result, performance ratios published last year may differ from those contained within this report.

Occupancy (%) is that proportion of the bedrooms available during the period which are occupied during the period.
Average Room Rate (ARR) is the total bedroom revenue for the period divided by the total bedrooms occupied during the period.
Room RevPar (RevPAR) is the total bedroom revenue for the period divided by the total available rooms during the period.
Total RevPar (TrevPAR) is the combined total of all revenues divided by the total available rooms during the period.
Payroll % is the payroll for all hotels in the sample as a percentage of total revenue.
GOPPAR is the Total Gross Operating Profit for the period divided by the total available rooms during the period.

Services: For an inside view of a local or regional market place in the hotel sector, bespoke HotStats reports are available. Terms and conditions apply. Visit www.hotstats.com to view a sample report.

HotStats provides two reporting tools to hoteliers:

  • Our unique profit and loss benchmarking service which enables monthly comparison of hotels’ performance against their competitors. It is distinguished by the fact that it provides in excess of 100 performance metric comparisons covering 70 areas of hotel revenue, cost, profit and statistics providing far deeper insight into the hotel operation than any other tool.
  • Our latest innovation in daily revenue intelligence, MORSE. Amongst its reporting are daily and highly granular market segmentation metrics as well as distribution channel and source of booking analysis. It takes daily market intelligence to a whole new level.

©HotStats Limited 2013 Unless otherwise attributed, all materials in this press release is the copyright of HotStats Limited.

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