European Chain Hotels Market Review - December 2010
London hoteliers finish top of Europe in 2010
The cold weather in the UK towards the end of the year was not enough to diminish headline performance levels as its capital achieved a Gross Operating Profit per Available Room (GOPPAR) of €105.07, according to the latest HotStats survey from TRI Hospitality Consulting.
Although at €211.56 hotels in London did not achieve the highest Total Revenue per Available Room (TrevPAR) in the sample, that accolade went to Zurich at €215.12, thanks to a 12.1% increase profitability, London finished the year approximately 47% ahead of the second best performing city in the sample (Zurich), which achieved a year-end GOPPAR of €71.51.
As has been a recurrent theme throughout the year, London's staggering profitability conversion rate at 49.7% of total revenue, may be attributed to a strong revenue performance, but more crucially the astute management of costs and in particular payroll levels.
Whilst profitability levels in cities such as Paris and Vienna during 2010 have been damaged by payroll levels close to 40% of total revenue, London hoteliers benefit from a payroll cost of just 23.1% of total revenue.
Despite achieving one of the lowest recorded occupancy levels of the year in December (76.5%) due to heavy snow, sub-zero temperatures and travel disruption, according to the latest HotStats survey, four and five-star London hotels finished the year at a remarkable average room occupancy of 84.6%, following an increase of 0.9 percentage points from 2009.