HotStats UK Chain Hotels Market Review – April 2016

Conference Segment Fuels Strong Profit Growth for North West Hotels in April
Hoteliers in the North West of England recorded an 11.7% year-on-year increase in profit per room in April fuelled by a 19.5% increase in the achieved rate in the residential conference segment, according to the latest data from HotStats.

Despite a 0.1 percentage point decline in room occupancy, RevPAR (Revenue per Available Room) increased by 5.7% for the month, with the residential conference segment contributing to a 5.9% uplift in achieved average room rate, to £80.88 from £76.41 during the same period in 2015. In addition to the growth in the residential conference segment rate, an 8.2% increase in conference & banqueting revenue on a per available room basis was recorded, which contributed to a 5.5%increase in TrevPAR (Total Revenue per Available Room) to £109.00 for the month.

Whilst year-on-year payroll levels were up by 3.3% on a per available room basis, as a result of the growth in total revenue, hotels in the North West recorded an 11.7% increase in profit per room in April, which contributed to year-to-date growth of 1.6%.

Newcastle Hoteliers Feel the Pinch as New Supply Dilutes Top and Bottom Line Performance
Despite recording an 8.5% year-on-year increase in profit per room this month, year-to-date GOPPAR (Gross Operating Profit per Available Room) has dropped by 5.5% in 2016 against the same period in 2015 as new supply has contributed to a dilution of headline performance levels.

Whilst hotels in Newcastle were able to record a 0.1% increase in RevPAR in April, year-to-date this measure has fallen by 7.7%, which has primarily been as a result of a 5.7 percentage point decline in room occupancy, suggesting that the hotels within our sample have been impacted by new openings.

As regional economic indicators for the North East have remained positive, the supply increase in Newcastle has been significant, with an increase of 817 branded hotel rooms since the beginning of 2015, which have included the 251-bedroom Crowne Plaza Stephenson Quarter, 160-bedroom Hampton by Hilton, 222-bedroom Motel One and the recent opening of the 216-bedroom Premier Inn (The Gate).

Although food & beverage revenue remained broadly stable at £29.87 per available room, which has tempered the year-to-date decline in TrevPAR to 4.4%, a 1.6 percentage point increase in payroll as a proportion of revenue contributed to the decline in profit per room for Newcastle hotels in the four months to April 2016.

Stratford-upon-Avon Hotels Bounce Back in April Despite Shift in Easter Trade
Although the Easter holidays moving from April to March this year has upset the balance slightly for hotels in Stratford-upon-Avon, they have responded well recording a 26.7% increase in profit per room for the month, as hotels in the town were able to drive volume and price in the commercial segment.

Whilst hotels in the Stratford-upon-Avon market are typically heavily reliant upon demand from the leisure segment in April, volume from this source (ie individual leisure and group leisure) fell to 25.6% of total roomnights sold from 31.9% during the same period in 2015.

In its place, demand from the commercial sector increased to 43.1% of total demand, due to an increase in the volume of demand attributed to the residential conference (+8.2 percentage points) and corporate (+1.5 percentage points) segments. The shift in demand also contributed to the 56.3% increase in conference & banqueting revenue on a per available room basis at hotels in Stratford-upon-Avon for the month and the subsequent 8.8% year-on-year increase in TrevPAR.

Despite the uplift in April, year-to-date RevPAR at Stratford-upon-Avon hotels remains 2.2% behind the same period in 2015 with profit per room now 9.5% below, as payroll levels have increased by 2.1 percentage points in the first four months of 2016, to 38.6% of total revenue from 36.5% during the same period in 2015.

Media Contact

Sita Banigo

Sales Executive [email protected]