Prague Hotel Market Spotlight

OVERVIEW

• The sample of branded full-service hotels in Prague recorded a notable increase in profit during the 12 months running to October 2024. The GOP per available room (PAR) increased by 24.4% driven by a 16.2% revenue increase and despite rising expenses (+10.2%).
• Rooms Revenue increased by 18.2%, resulting from a 9.2% growth in ADR and an 8.3% rise in occupancy. F&B revenue increased by 8.8%, reaching €45 per occupied room (POR).
• Occupancy rate surpassed 78%, boosted by the months of February, March and July with +28.4%, +14.3% and +14.5% growth, respectively. This was due to growing demand and a moderate supply pipeline, with 547 new rooms opening during the first 10 months of 2024, resulting in a 1.5% increase in total supply.
• The primary driver for expense growth was the Other Expenses department
  (+€4 PAR), followed by Payroll (+€3.8 PAR).
• Overall, 64% of revenue growth flowed through to the bottom line, increasing GOP margin from 42.2% to 45.2%.

COST OF SALES

• Total COS increased by €0.30 PAR (+2.5%), driven by a rise in the Rooms department, which was not fully offset by a decrease in the F&B department (+11.4% and -3.9%, respectively).

PAYROLL COSTS

• Total payroll costs increased by +10.7%, from €36 to €39 PAR.
• The largest increase was in the F&B and S&M departments, where payroll grew by +€1.7 PAR (+2.6% and +14.2%, respectively).

UTILITIES COSTS

• Utility costs increased by €0.60 PAR, primarily due to a significant rise in electricity expense (+€11 PAR), which was offset by an equally notable reduction in gas expense (-€11 PAR).

OTHER EXPENSES

• Other Expenses registered the highest growth compared to last year, rising by 13.4% from €30 to €34 PAR. This increase was driven by a €1.43 PAR rise in Other Expenses within the S&M department.