Hotstats UK Chain Hotels Market Review - September 2013

London back on track thanks to rate increase
Hotels in London bounced back in September 2013 after two consecutive months of negative year-on-year comparisons with a 6.4% increase in total revenues per available room (TrevPAR) and an 8.2% growth in Gross Operating Profit per available room (GOPPAR), according to the latest HotStats survey of 624 full-service hotels across the UK.

The growth is mainly rate driven with hoteliers pushing the average room rate (ARR) up by 8.9% to £158.17 compared with £145.22 in September 2012 and representing a positive gap of £15.78 in the rolling 12-months average. This surge only resulted in a slight occupancy decrease of 0.6 percentage points to 88.0% leading to a RevPAR increase of 8.2% for the month of September to £139.15.

Besides the rooms department contribution, additional revenue per available room derived from food (+3.7%) at £23.49 and meeting room hire (+1.0%) at £8.49 helped to deliver a 6.4 increase in TrevPAR at £188.87 against £177.49 in the same month last year.

Departmental profit conversion per available room (DOPPAR) improved by 7.7% to 69.2% of total revenue thanks to cost control and, combined with a 1.5 percentage points reduction in payroll, GOPPAR in September 2013 surged by 8.2% to £96.54.

When looking at the third quarter performance, occupancy is the only key performance indicator showing a positive movement with a 3 percentage points increase to 87.1% compared to 84.1% in Q3 in 2012. Assessing the RevPAR, TrevPAR and GOPPAR perspective, results showed a decrease by 4.9%, 8.0% and 11.5% respectively compared to the same period last year largely due to the Olympics effect.

Provinces hotels continue to shine
Provincial hoteliers experienced positive movements in all key performance indicators in September reported in the latest HotStats survey of 624 full-service hotels across the UK. This is the fourth consecutive month of increases in all key measures with total revenues per available room (TrevPAR) and Gross Operating Profit per available room (GOPPAR) growth in September by 2.4% and 2.7% respectively.

RevPAR growth of 4.8% was facilitated by a combination of rising average room rate (+3.8%) and an increase in Occupancy of 0.7 percentage points. Leisure is the only other department with a positive increase of 2.3% at £5.28 per available room and other notable revenue sources remained flat (food) or slightly decreased (beverage and meeting room hire) leading to a growth in TrevPAR to £107.12. Continued cost control contributed to further improvements in profitability, by 2.7% to £36.37 per available room.

When looking at the third quarter performance, the RevPAR, TrevPAR and GOPPAR results showed a surge by 5.7%, 3.7% and 5.5% respectively compared to Q3 in 2012 despite a 2.5% escalation in overheads per available room.

In September 2013, York hoteliers achieved Occupancy of 91.7% (+1.2 pts y-o-y) and, added to a 1.4% increase in ARR, grew RevPAR by 2.7% to £64.64. Room revenue accounted for 63.6% of total revenue; other revenues per available room that saw an increase included meeting room hire, being the highest (+10.6%), leisure +3.5% and food +1.7% leading to a TrevPAR rise of 1.7% to £101.61.

Despite a payroll decrease of 0.5 percentage points, hotels in York saw their profitability impacted with a surge in operating expenses: rooms (+0.3%), food (+3.7%) and leisure (+8.0%) and overheads significantly increased by 7.4%. As a result, GOPPAR performance was down by 3.9% to £31.99.

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 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.

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