The UK’s provincial chain hotels reported a fall in profit during June as rising costs took their toll, according to the latest HotStats survey from TRI Hospitality Consulting. Average daily income before fixed charges (IBFC) – also known as gross operating profit – decreased by 6.9 per cent to £39.69 per available room.
The European hotel sector is currently looking very healthy indeed, boosted by increased demand and supply. Occupancy rates have remained fairly stable but ADR and RevPAR have increased indicating better value sales. According to a new report published by EyeforTravel Research, Europeans spent an estimated EUR 81 billion on accommodation in 2007, including travel within and outside of Europe.
The European market accounts for a vast majority of international travel, sustained by a healthy and growing economy, an abundance of countries at its doorstep and the associated tendency of Europeans to take many trips abroad. A steady rise in GDP and spending power accompanies this parallel increase in travel and even with looming global depression and rising oil prices, the European economy as a whole continues to perform well. According to EyeforTravel Research, travel revenue in 2007 exceeded the previous year’s financial figures by 4%, approaching an estimated Euro 256 billion in sales.
With a 1.2% RevPAR increase, June shows positive growth compared to the previous year’s exceptional results. All hotel categories display excellent occupancy rate levels.
Paradoxically, the 1.1% decrease of RevPAR registered in last June by the Parisian hotel industry in Paris has been quite good news, meaning that there is the upmarket segment held a very strong position. The month of June 2007, which was taken as a reference, had indeed displayed a rise of 28% in its turnover due to an exceptional event: the Airshow Fair 2007. Succeeding in avoiding a further decrease was in itself an indicator of the industry’s sound performance.
Pre-tax income for the United States hotel industry in 2007 increased 5.3 percent to a record $28 billion, according to the recently released 2008 Hotel Operating Statistics (HOST) Study issued by Smith Travel Research (STR). The industry posted an all-time best $139.4 billion in revenue in 2007—which is over $6 billion more than it generated in 2006 ($133.4 billion)—and for the second consecutive year, gross operating profit as a percentage of revenue came in at 41.3.
HVS Hodges Ward Elliott Advises REIT Asset Management As It Sells Three UK Hotels | REIT Asset Management, advised by HVS Hodges Ward Elliott, has sold three hotels from its Brentwood Hotels portfolio to Moorfield Group. The hotels, which have 182 rooms in total, are the St George Hotel in Harrogate, the Eden Arms Hotel in Rushyford and the George Hotel in Chollerford. The hotels were operated under the Swallow Hotels brand; under Moorfield's ownership the operation has transferred to Shearings. HVS Hodges Ward Elliott is acting as agent on behalf of REIT Asset Management for the Brentwood Hotels portfolio.
Chain hotels in Budapest reported the greatest increase in profit during May, according to TRI Hospitality Consulting’s HotStats survey of 10 European hotel markets.
UK chain hotels recorded an overall drop in profit during May despite average occupancy holding steady, according to the latest HotStats survey from TRI Hospitality Consulting.
MA Kharafi Group Anoints Sovereign | MA Kharafi Group, the Kuwaiti conglomerate, has announced the launch of Sovereign Hospitality Holdings, an independent company that will invest in hospitality, tourism and real estate around the world. Sovereign, which has its base in the Swiss city of Geneva, owns and operates a starting portfolio of 21 hotels (more than 4,000 rooms); these are located in Egypt, South Africa, The Gambia, Syria, Lebanon and Albania. Sovereign already has new projects under development in the African nations of Libya, Ethiopia, Mauritania and Senegal (see next item).
Swallows Fly To Travelodge | Travelodge has added seven hotels and 669 rooms to its ever expanding portfolio in the UK. The company has invested a total of £28.4 million in two Swallow hotels – one in the Scottish capital Edinburgh, the other in the English seaside town of Scarborough – and will spend a total of an additional £7 million converting the hotels to the Travelodge brand by early next year. Travelodge will invest £34.5 million in five other hotels. Two are in North Wales: in Porthmadog and Caernarfon; the others are in London (Finsbury Park), which takes £10.1 million of the money; Egham, in Surrey; and the city of Gloucester.
Despite current economic concerns, hoteliers across the UK reported steady levels of growth in May, according to preliminary monthly figures released today by PKF Hotel Consultancy Services.
Wyndham’s Worldwide Drive | Wyndham Hotel Group has announced to the world that so far this year it has opened 30 hotels outside of North America. As part of this expansion the company has ventured into new markets, and added new countries to its portfolio, with the opening of its first properties in Austria and Ghana, the 120-room Ramada Salzburg City Centre and the 75-room Ramada Resort Accra Coco Beach, respectively.
Sol Meliá Owns 40 Per Cent Of The Sky | Sol Meliá has teamed up with its fellow Spaniards Caja Mediterráneo-CAM, Invernostra and Caja Duero to acquire the five-star Hotel Sky, in Barcelona. The deal was valued at €103 million, and Sol Meliá’s stake in the hotel is reported to be the largest, at 40%. The 259-room hotel will open in the third quarter of 2008, under Sol Meliá’s management, as the ME Barcelona. Sol Meliá launched the ME by Meliá brand in 2006 and the only other example of a hotel with the brand in Spain at present is the ME Madrid.
After 2 mitigate months in March and April, the French hotel industry ties up again with high growth rate experienced early this year. With an improving occupancy rate (+2.7 pts), price policy’s efficiency (average rate increase 5.7%) leads to a growth in RevPAR of 9.8%.
A check on hospitality, with Jonathan Tisch, Loews Hotels CEO; Bill Marriott, Marriott International CEO and Barry Sternlicht, Starwood Capital CEO. Interview taped at 30th Anniversary NYU International Hospitality Industry Investment Conference.
The author considers that a strengthened understanding by hotel investors of revenue management principles will permit investors to make better investment decisions. Revenue Management has become an increasingly important topic in the hotel industry in recent years, and has in many ways gone from being a property-level discipline primarily to become an important tool for hotel investors in terms of asset management.
Russia's Mother Of All Hotel Chains (Potentially) | International Hotel Investments (IHI) and Intourist, the Russian tour operator and hotel company, are aiming to create the largest hotel chain in Russia. They have formed a shared investment fund that will be putting money into the development of four-star and five-star hotels in cities across the country. The fund has an initial US$100 million at its disposal. IHI and Intourist will jointly manage the hotels under brands including Corinthia and Intourist.
Manhattan hotels pushed their aggregate performance to new heights in 2007, setting records for occupancy, average rate, and RevPAR. Occupancy in the leading hotel market in the U.S. rose to 85.9%, while average rate soared to $298.81. For the fourth consecutive year, RevPAR recorded double-digit growth in 2007, climbing 14.3%, indicative of the continued strength of the Manhattan lodging market. These high rates were caused primarily by continued strong lodging demand levels in 2007, which allowed hotel operators to be more selective with lower-rated demand and increasingly boost rates, thereby accommodating greater numbers of higher-rated travelers. We note that the market’s overall occupancy level of roundly 86% in 2007 indicates that Manhattan continued to operate at near-maximum-capacity levels. Because of a limited supply increase in 2007, the market continued to experience many sell-out nights, causing a significant amount of demand to remain unaccommodated. Given the larger-than-ever construction pipeline in Manhattan, a substantial portion of previously unaccommodated demand is expected to be accommodated in the future. However, as a result of the recent credit crunch and the protracted disruption in the capital markets, some of the hotel developments proposed for Manhattan may not come to fruition, thereby reducing the number in the current pipeline, which bodes well for the market’s existing lodging facilities.
UK hoteliers’ recorded robust levels of growth in April with both occupancy and room rate consistently high across the country, according to preliminary monthly figures released today by PKF Hotel Consultancy Services. In contrast to March, where the early Easter break meant a decline in business travellers compared to 2007, it was the 2007 Easter break which meant the figures for April 2008 were so buoyant.