HotStats European Chain Hotels Market Review – September 2014

With demand shooting up by 12.2 percentage points in the Greek capital and average room rate (ARR) increasing by 13.3%, revenue per available room (RevPAR) grew by a stunning 33.0%. Similar performances were registered in non-rooms departments and total revenue per available room (TRevPAR) rose by 27.7%. Astute operating cost control and a significant decrease in payroll (-6.2 percentage points) resulted in departmental operating profit per available room (DOPPAR) surging by 35.5% and GOPPAR by 71.0% to €84.90.

Hamburg hoteliers recorded a 25.1% surge in RevPAR thanks to a 2.7 percentage point increase in occupancy combined with a 21.2% growth in ARR, most notably fuelled by an 18.5% increase in the Leisure segment rate. Additional revenue per available room from food (+4.7%), beverage (+15.3%) and leisure (+11.4%) enhanced TRevPAR levels by 19.9% to €206.62. Despite overheads per available room climbing by 3.8%, a 6.1 percentage point decrease in payroll combined with proficient operating cost control helped to deliver a DOPPAR and GOPPAR growth of 29.9% and 44.5% respectively.

Cold September in Amsterdam and Frankfurt

Hotels in Amsterdam experienced challenging conditions in the month of September and reported negative year-on-year comparisons across all key performance indicators. A 0.4 percentage point drop in occupancy combined with a 9.2% decline in ARR led to 9.5% RevPAR decrease. Mixed performances were recorded in ancillary departments and TRevPAR levels dropped by 7.8% to €272.36. With payroll going up by 1.3 percentage points, DOPPAR declined by 9.7% to €175.81, and despite overheads per available room decreasing by 3.0%, Amsterdam hotels' GOPPAR declined by 11.7% compared to the same period last year.

Frankfurt hoteliers managed to increase occupancy by 2.1 percentage points in September, which was quickly negated by a 5.4% drop in ARR and as a result, RevPAR decreased by 2.9%. A closer look into the rooms department shows a 6.0% increase in travel agent commission per occupied room compared to the same period last year. Mostly negative movements were registered in non-rooms departments and TRevPAR declined by 4.0% to €179.76. A general increase in costs contributed to a DOPPAR drop of 6.2% and with payroll rising by 1.6 percentage points, GOPPAR fell by 9.4% to €77.17. When looking at the profit conversion rate, hoteliers still managed to close the month with 49.2%, what represents a 2.6 percentage point decrease compared to September 2013.

Revenues up but profits down in Bucharest

In September, hotels in Bucharest registered a 0.6% RevPAR increase only driven by a 5.1 percentage point surge in demand, as ARR dropped by 5.4% to €92.77 compared to the same period last year. More positive performances were recorded in ancillary departments that contributed to a TRevPAR gain of 1.8%, with increases per available room from food (+1.7%), beverage (+14.8%) and meeting room hire (+7.9). In the meantime, DOPPAR increased by 0.7% but due to a significant surge in overheads per available room (+9.6%) GOPPAR declined by 2.4% to €64.85, resulting in a profit conversion drop of 2.1 percentage points to 49.8%.