HotStats European Chain Hotels Market Review – November 2014

November was a strong month for hotels in the Hungarian capital with increases in average room rate (ARR) of 10.4% and occupancy of 7.2 percentage points, leading to a rooms revenue per available room (RevPAR) growth of 21.9% to €64.66. A closer look at the segmentation for the month demonstrates that all segment rates increased with Residential Conference rate (accounting for 16.7% of the business mix) being the only exception that declined by 2.0%. Other prominent segments in terms of rooms sold were Corporate (30.6%), Leisure (27.4%) and Tours/Groups (9.9%) with rates increasing by 12.3%, 10.7% and 20.7% respectively. With mainly positive movements recorded in non-rooms revenues, total revenue per available room (TRevPAR) rose by 15.2% and cost control helped to deliver the GOPPAR growth of 25.1%.

Munich forged ahead among other European cities by recording the highest GOPPAR uplift of the month, namely 52.8% compared to the same period last year. A double-digit surge in RevPAR (+24.3%) driven by a 19.1% increase in ARR and a 3.3 percentage point leap in occupancy, fuelled TRevPAR levels (+20.5% to €164.69) together with a general increase in non-rooms revenues. A similar look at the segmentation reveals that all segment rates surged in November, with the Corporate segment representing 38.2% of the total rooms sold. Astute operating cost control together with payroll declining by 5.4 percentage points further improved the performance, leading to a GOPPAR surge of 52.8% to €63.80.

RevPAR flatters to deceive in Madrid and Vienna

Madrid hoteliers managed to simultaneously increase occupancy by 0.7 percentage points to 63.6% and ARR by 2.5%, resulting in a RevPAR growth of 3.7% to €79.97. However, mixed performances recorded in non-rooms revenues softened the TRevPAR surge to 0.7%. A slight increase in payroll of 0.2 percentage points combined with a weighty surge in overheads per available rooms (+4.0%) prohibited hotels from converting revenue gains to the bottom line, with GOPPAR showing year-on-year negative movements of 1.1%.

In November, hotels in the Austrian capital boosted ARR by 2.3% at the expense of occupancy (-1.3 percentage points), leading to a 0.4% uplift in RevPAR. Yet hoteliers in Vienna also experienced disappointment despite the RevPAR growth. Indeed, mixed performances in ancillary revenues resulted in TRevPAR falling by 1.7% and departmental operating profit per available room (DOPPAR) also declined by 9.2%. Increasing overhead and payroll costs did not help the overall performance and GOPPAR dropped by 22.6% to €26.33 compared to the same period last year.

Challenging November for Istanbul

Hotels in Istanbul registered negative year-on-year comparisons across all key performance indicators for the month of November. Both occupancy and ARR declined by 2.8 percentage points and 6.7% respectively to deliver a RevPAR drop of 10.3%. A general decrease in non-rooms revenues led to a TRevPAR fall of 12.1% and DOPPAR went down by 17.8%. Despite overheads per available room remaining virtually flat, payroll climbed by 4.9 percentage points and contributed to a GOPPAR decline of 29.4%.