HotStats European Chain Hotels Market Review – August 2014

Hotels in Dublin increased ARR by 10.6% and occupancy remained virtually flat at 90.7%, as a result rooms revenue per available room (RevPAR) rose by 10.3%. A closer look at the segmentation for August demonstrates that all segment rates increased with Residential Conference rate (accounting for 5.1% of the business mix) being the only exception declining by 6.5%. Prominent segments in terms of rooms sold were Leisure (28.3%), Tours/Groups (18.8%) and Corporate (18.3%) with rates increasing by 5.8%, 24.8% and 9.0% respectively. With positive movements recorded in non-rooms revenues, total revenue per available room (TRevPAR) rose by 8.5% and astute cost control helped to deliver the GOPPAR growth of 21.9%.

Vienna hotels also experienced a surge in ARR of 10.8%, but with occupancy increasing by 0.9 percentage points leading to a RevPAR growth of 12.0% in August. A similar look at the segmentation reveals that all segment rates surged with the exception of the Corporate market (-1.9%) which accounted for 19.2% of the business mix. Leisure and Tours/Groups represented almost equally 51.9% of the total number of rooms sold with rates climbing by 6.4% and 16.1% respectively. The Residential Conference segment accounted for 5.9% of the total demand and the associated rate went up by 15.2%. TRevPAR also increased by 9.4% and with efficient cost control, GOPPAR rose by 25.0%.

Berlin and St Petersburg challenged

A 4.2 percentage point increase in occupancy was almost cancelled out by a 4.6% decline in ARR for Berlin hotels in August, leading to a positive RevPAR movement of only 0.3%. Negative performances were recorded in ancillary departments and TRevPAR levels dropped by 4.8%. With departmental operating profit per available room (DOPPAR) declining by 8.1%, payroll went up by 1.2 percentage points and despite overheads per available room going down by 1.3%, GOPPAR decreased by 17.0% compared to the same period last year.

St Petersburg hotels in August recorded negative year-on-year comparisons across all key performance indicators, confirming the unfavourable trend of 2014. With RevPAR and TRevPAR going down this month by 19.7% and 16.9% respectively, hoteliers were unable to adapt costs and as a result DOPPAR decreased by 22.6% and GOPPAR by 30.0%, which still represents a gross operating conversion of 39.1% for the month of August.

Surge in demand supported profit growth in Rome

Despite a drop of 4.8% in ARR, Rome hoteliers experienced a surge in demand of 8.0 percentage points, leading to a RevPAR uplift of 7.7% in August. With revenue per available room from food and beverage also increasing by 3.1% and 1.1% respectively, TRevPAR grew by 6.3%. Astute operating cost control further boosted DOPPAR levels by 7.6%, and was also underpinned by travel agents commission reducing by 10.3%. With payroll decreasing by 0.6 percentage points, GOPPAR shot up by 20.4% despite overheads per available room slightly increasing.