HotStats UK Chain Hotels Market Review – July 2013

London hoteliers nurse Olympic hangover...
A year after successfully hosting “the greatest event on earth”, hotels in London experienced, unsurprisingly, a total revenue and profit decline in July of -6.7% and -14.6% respectively compared to the same month last year, according to the latest HotStats survey of 624 full-service hotels across the UK.

In fact, the capital showed negative year-on-year results across most key performance indicators with occupancy being the only exception. Hoteliers saw a notable increase of 7.1 percentage points to 87.9% compared to July in 2012 and 6.2 percentage points above the rolling 12 months.

This increase in occupancy was at the expense of the average room rate (ARR) which decreased by 12.9% resulting in revenue per available room (RevPAR) dropping by 5.2% to £130.59 compared to £137.78 last year. The market segmentation shifted compared to July 2012 with a fall in the residential conference (-6.4%) and corporate (-3.4%) segments and an increase in leisure (+6.2%) and tours/groups (+4.2%).

Food & beverage departments were the only two revenues to surge with a 2.6% rise in food and a significant growth in beverage (+11.4%) this month. Not surprisingly, the decline in residential conference demand caused a decrease in meeting room rental, which fell by 46.7%. Total revenue per available room (TrevPAR) therefore decreased by -6.7% compared to the same month last year.

A decline in departmental revenue conversion (-10.7%) and a one percentage point increase in payroll led London hoteliers to a -14.6% fall in gross operating profit per available room (GOPPAR) and impacted the calendar year profit performance by -2.1%.

...while the sunshine cheers Provinces hoteliers
Gross operating profit per available room (GOPPAR) in provincial hotels rose for the fourth consecutive month in July by 3.9%, according to the latest HotStats survey. The positive year-on-year performance in the provinces this month was largely a result of the hot weather with holidaymakers happy to make the most of the UK’s hotels.

Positive results were recorded in all key performance indicators: both occupancy and ARR increased by 3.5 percentage points to 80.3% and by 0.4% to £71.78 respectively, and RevPAR rose by 4.9% compared to the same month last year. Additional growth in food (+1.0%), beverage (+3.3%) and leisure (+2.9%) revenues contributed to an increase total revenues per available room of 3.0% representing a twelfth consecutive month of TrevPAR growth.

Astute cost controls with overheads decreasing by -2.3% and payroll efficiency reflected operators ability to convert revenue gains to profits with a +3.6% GOPPAR increase this month and +2.6% for the rolling 12 months.

The UK Chain Hotels sample is composed of 624 hotels with an average hotel size of 177 bedrooms.

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 three and four-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 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.

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