RevPAR Up, GOPPAR Down at Hotels in Mainland Europe
Mainland European hotels generated revenue in August; they just had trouble holding onto it. Despite a 0.9% year-over-year increase in RevPAR, coupled with 0.4% growth in TRevPAR, GOPPAR for the month turned negative, down 0.8% YOY, according to data from HotStats.
Rising costs had a hand in the profit decrease. Payroll on a per-available-room basis was up 1.1% YOY and overheads were up 2.3%.
RevPAR in the month was led by a 0.2-percentage-point increase in room occupancy to 79%, as well as a 0.6% increase in achieved average room rate, which grew to €167.72.
However, a 0.7% YOY decline in ancillary revenues, led by a 1.1% drop in food & beverage revenue, dampened the growth in total revenue, reflected in the 0.4% TRevPAR growth rate to €183.72.
Profit & Loss Key Performance Indicators - Mainland Europe (in EUR)
"Strong growth in average room rate, resulting in positive RevPAR growth, has been the catalyst for increased profit at hotels in mainland Europe for a number of years," said Michael Grove, Managing Director, EMEA, HotStats. "However, a global concern continues to be weakening RevPAR growth, which combined with rising costs, is squeezing profits."
For hotels in Dublin, August represented an eighth consecutive month of profit decline, as the Irish capital contends with additions to hotel supply.
The 11.4% YOY decline this month contributed to the ongoing decrease in profit at hotels in the city, which was recorded at -10.7% in the eight months to August 2019 and is a significant change in trajectory from the period of substantial annual GOPPAR growth since 2015.
The drop in profit this month was led by a 6.2% decrease in RevPAR, which was primarily due to a 7.0% YOY decline in average room rate, which has been on the decline since the beginning of 2019.
Despite the YOY decline in August, profit per room at hotels in Dublin remained relatively robust at €104.27, which was 18.3% above the YTD figure, illustrating the appeal of the Irish capital as a leisure destination.
Profit & Loss Key Performance Indicators - Dublin (EUR)
Eastward, hotels in Prague continued to enjoy a strong period of trading in 2019, as GOPPAR grew by 10.4% YOY to €52.69.
Prague remains a popular visitor destination and the leisure segment comprised 56.8% of roomnights sold in August.
An increase in volume and price helped fuel a 7.3% YOY increase in RevPAR to €86.63, which was supported by growth in ancillary revenues, including an 18.8% uplift in food & beverage revenue.
The only blight on a strong performance was the 10.1% increase in payroll to €31.04 per available room, as hotels in Prague continue to battle with this rising cost.
Nevertheless, August will be noted as a positive month of performance, with profit conversion recorded at 42.5% of total revenue.
Profit & Loss Key Performance Indicators - Prague (EUR)
HotStats provides a unique profit-and-loss benchmarking service to hoteliers from across the globe that enables monthly comparison of hotels' performance against competitors. It is distinguished by the fact that it maintains in excess of 500 key performance metrics covering 70 areas of hotel revenue, cost, profit and statistics, providing far deeper insight into the hotel operation than any other tool. The HotStats database totals millions of hotel rooms worldwide. For more information, visit www.hotstats.com.