HotStats European Chain Hotels Market Review – April 2015

April was a strong month for hotels in the Catalan capital with rises in average room rate (ARR) of 11.6% and occupancy of 3.7 percentage points, leading to a rooms revenue per available room (RevPAR) growth of 17.1% to €149.92. Additional increases were reported in revenues per available room derived from beverage (+24.0%), food (+15.3%) and meeting room hire (+14.9%) which further supported the total revenue per available room (TRevPAR) surge of 16.5%. Astute operating cost control and a notable decrease in payroll (-1.6 percentage points) resulted in departmental operating profit per available room (DOPPAR) rising by 23.7%. Overheads per available room climbed by 9.2% mostly due to sales and marketing labour costs increasing by 41.1%, but that was not enough to temper the GOPPAR growth of 30.5%.

Hotels in the Belgian capital simultaneously increased occupancy (+1.6 percentage points) and average room rate (+15.3%) to produce a RevPAR uplift of 17.8% in April, compared to the same period last year. With surges in revenue per available room derived from C&B room hire (+9.9%), beverage (+8.2%) and food (+2.0%), non-rooms departments' results also contributed to the TRevPAR growth of 12.1%. Despite overheads per available room rising by 4.0%, a significant reduction in payroll (-4.9 percentage points) helped hoteliers produce increases in DOPPAR and GOPPAR of 19.8% and 34.7% respectively.

Moscow and Paris lag behind
Moscow hotels registered negative year-on-year comparisons across all key performance indicators for the month of April. Both occupancy and ARR declined by 4.5 percentage points and 4.4% respectively to deliver a RevPAR drop of 10.7%. A closer look into the rooms department shows a 42.5% increase in travel agency commission per occupied room compared to the same period last year. Similar downward movements were recorded in non-rooms revenues per available room with meeting room hire (-21.0%) in the lead and TRevPAR decreased by 9.6% to €124.47. With payroll going up by 1.4 percentage points to 27.2%, DOPPAR fell by 7.2% to €84.27 thereby contributing to a GOPPAR decline of 7.7% to €51.50.

Paris hotels also suffered from a combined decrease in occupancy (-1.4 percentage points) and ARR (-4.2%), resulting in a RevPAR drop of 5.9%. Moreover, mixed results were recorded in non-rooms revenues and TRevPAR diminished by 6.1% to €334.13. With payroll rising by 2.6 percentage points, DOPPAR went down by 10.0% to €158.78, and GOPPAR fell by 18.4% to €80.60. When looking at the profit conversion rate, hoteliers closed the month with 24.1% which represents a 3.7 percentage point decrease compared to April 2014.

RevPAR up but profits down in Zurich

Hotels in Zurich demonstrated once again that RevPAR alone can be a misleading indicator of hotel performance with a rise of 0.2% this April, as both TRevPAR and GOPPAR levels went down by 3.1% and 14.9% respectively. A 3.0 percentage point increase in demand in contrast to a 3.9% drop in ARR delivered the RevPAR growth. However, mixed performances in ancillary revenues resulted in TRevPAR levels falling by 3.1% to €218.42 and DOPPAR also declined by 6.0% to €99.88. Increasing overhead and payroll costs did not help the overall performance and GOPPAR dropped by 14.9% to €50.53 compared to the same period last year.

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