HotStats European Chain Hotels Market Review – January 2014
Amsterdam and Milan off on the right foot
Gross Operating Profit per available room (GOPPAR) at hotels in Amsterdam and Milan surged by 6.2% and by 44.6% respectively in January, according to the latest HotStats.
The beginning of year saw hotels in the Dutch capital post a 1.4% decline in average room rate (ARR) to €150.60, paired with occupancy growth of 2.2 percentage points to 60.0%; RevPAR rose by 2.4% to €90.37 compared to the same period last year. Despite declines in non-rooms revenues, which led to a 5.3% decrease in TRevPAR to €133.91, departmental operating profit per available room (DOPPAR) remained stable and with payroll and overheads per available room decreasing, GOPPAR went up by 6.2% to €22.00.
In January hoteliers in Milan posted positive year-on-year increases across all key performance indicators. An 8.1% increase in ARR coupled with a 1.9 percentage point rise in occupancy led to a significant 10.9% increase in RevPAR. Additional improvements in non-rooms revenues helped to enhance TRevPAR performance by 11.6% to €155.80. A 3.2 percentage point decrease in payroll contributed to a DOPPAR and GOPPAR uplift of 20.6% to €80.82 and 44.6% to €37.12 respectively.
While Barcelona and Frankfurt have a slow start
Barcelona hotels experienced an increase in occupancy (+3.2 percentage points) but at the expense of the ARR, which declined by 6.4% producing a nearly flat RevPAR movement (+0.3%) to €66.83. Negative performances were registered in other departments with food revenue per available room being the only exception (+4.0%) and as a result TRevPAR went back by 2.6%. With operating costs under control, DOPPAR performance only reduced by 0.4% to €54.83 and despite efficient payroll management, GOPPAR diminished by 10.1% due to overheads per available room climbing by 6.7%.
In January, hotels in Frankfurt also achieved a surge in occupancy (+2.8 percentage points), but ARR fell by 2.0% resulting in a 2.4% RevPAR increase. Mixed performances were recorded in other departments leading to a 0.6% uplift in TRevPAR. A general increase in costs served to reduce DOPPAR by 0.7% to €80.70 and GOPPAR by 2.0% to €45.14.
Bucharest experiences challenging conditions
In January, a 4.0 percentage point drop in occupancy cancelled out a 1.2% increase in ARR and as a result RevPAR decreased by 5.7%. But positive movements in food (+1.2%) and beverage (+6.5%) moderated the rooms revenue reduction occasioning a -3.1% fall in TRevPAR. Falling revenues combined with rising costs reduced GOPPAR by 12,8% to €22.35.
Closer examination of the cost structure reveals a 23.2% rise in travel agent commissions to €2.18 per room let impacting rooms department profit conversion by 1.4 percentage points to 79.1%. With payroll increasing by 2.3 percentage points, overheads per available room rose most notably in administration and general (+9.6%), sales and marketing (+6.1%) and property and maintenance (+2.9%) leading to a fall in profit conversion to 29.8% from 33.2%.
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.
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