Market Report Europe

European Chain Hotels Market Review - July 2016

Whilst total revenue levels at Berlin hotels fell by 8.3% this month, creeping costs in the German capital contributed to an 18.8% year-on-year drop in profit, according to the latest data from HotStats.

Whilst total revenue levels at Berlin hotels fell by 8.3% this month, creeping costs in the German capital contributed to an 18.8% year-on-year drop in profit, according to the latest data from HotStats.

Despite a packed summer schedule in the city, which included the six-day Classic Open Air Festival and Berlin Fashion Week, occupancy for Berlin hotels fell by 5.0 percentage points year-on-year to 80.1%, which in addition to a 2.6% decline in achieved average room rate, contributed to an 8.4% year-on-year decline in RevPAR (Revenue per Available Room).

And with declining revenue levels recorded in ancillary departments, including Food and Beverage (-6.6%) and Conference and Banqueting (- 2.3%), Berlin hotels suffered an 8.3% decrease in TrevPAR (Total Revenue per Available Room) to €139.59.

Despite successfully reducing costs on a per available room basis, hotels in Berlin suffered increases in both payroll (+1.8 percentage points) and overheads (+0.6 percentage points) as a percentage of total revenue.

As a result of the movement in revenue and costs, profit conversion at Berlin hotels fell to just 21.5% of total revenue this month. This is a trend that Berlin hotels have been struggling with throughout 2016, as despite RevPAR declining by just 0.6% year-to-date, to €106.71, profit per room has fallen by 3.1% to €47.25 on a per available room basis.

Rate Gain Fails to Offset Occupancy Decline as Profit Drops at Madrid Hotels

In contrast to most months for year-to-date 2016, the increase in achieved average room rate at hotels in Madrid in July was not sufficient to offset the drop in room occupancy, which contributed to a 10.2% decline in profit per room for the month.

Year-to-date 2016, Madrid hotels have been able to strategically drive price at the expense of volume, in order to achieve a 1.9% increase in RevPAR, to €101.14. In turn, this has contributed to a 1.2% year-on-year increase in TrevPAR to €147.68.

However, this month the 3.0% decline in RevPAR was accompanied by a drop in ancillary revenues, including Food and Beverage (-12.2%) and Conference and Banqueting (-31.4%), which led to a 5.2% drop in TrevPAR. As a result of the decline in revenue and increasing costs, year- on-year profit per room for the month fell by 10.2%. However, this was not sufficient to damage year-to-date 2016 performance, with hotels in Madrid recording a 5.0% increase in GOPPAR (Gross Operating Profit per Available Room) to €48.79.

Rising Costs Challenging Ancillary Department Hoteliers Profit for Prague

Despite hotels in Prague achieving a year-on-year GOPPAR increase of 1.9% in July, the increase was almost entirely due to growth in the Rooms department as significant profit declines were recorded in the Food and Beverage (-20.0%) and Leisure (-21.9%) departments.

Hotels in Prague successfully recorded a 2.3% increase in RevPAR for July, to €76.34, as a 0.9 percentage point decline in occupancy was offset by a 3.3% increase in achieved average room rate, which contributed to a 2.2% increase in Rooms department profit per room.

However, an 8.3% year-on-year decline in revenue in the Food & Beverage department was further exacerbated by an increase in both cost of sales (+29.6%) and payroll (+7.5%), which contributed to the 20.0% year-on-year decline in departmental profit.

The picture for the leisure department was even more challenging, with a 31.3% increase in revenue cancelled out entirely by an increase in cost of sales (+14.3%) and payroll (+121.4%), which contributed to the 21.9% drop in Leisure department profit per room. 

Graph - European Chain Hotels Market Review - July 2016

Click here ( Adobe Acrobat PDF file) to view full the report.


For an inside view of a local or regional market place in the hotel sector, bespoke HotStats reports are available. Terms and conditions apply. Visit www.hotstats.com to view a sample report.

HotStats provides two reporting tools to hoteliers:

Our unique profit and loss benchmarking service which enables monthly comparison of hotels’ performance against their competitors. It is distinguished by the fact that it provides in excess of 100 performance metric comparisons covering 70 areas of hotel revenue, cost, profit and statistics providing far deeper insight into the hotel operation than any other tool.

Our latest innovation in daily revenue intelligence, MORSE. Amongst its reporting are daily and highly granular market segmentation metrics as well as distribution channel and source of booking analysis. It takes daily market intelligence to a whole new level.


For more information contact:
Enquiries
+44 (0) 20 7892 2241
enquiries@hotstats.com



Logos, product and company names mentioned are the property of their respective owners.

Request Information from this organization

Please click the link below to request more information from the organization or company featured in this article.

Request Information from HotStats