A 5.6% year-on-year increase helped hotels in the UK hit a historic TRevPAR high this month, propelled by a robust year-on-year increase in RevPAR and also supported by growth in non-rooms revenues, according to the latest worldwide poll of full-service hotels from HotStats.
At £162.48 per available room, TRevPAR at hotels in the UK in July was 0.8% above the previous high of £161.14 recorded in September 2017 and represented a second consecutive month of TRevPAR growth in what has otherwise been a fairly forgettable year of trading for hotels in the UK.
The growth in total revenue was driven by a 7.9% increase in RevPAR, which hit £114.34 this month, and was also a record, far exceeding the previous high of £107.14 achieved ten months earlier.
Hotels in the UK successfully recorded an increase in both room occupancy (+1.7-percentage points), to 87.1%, as well as a 5.7% increase in achieved average room rate, which soared to a high of £131.21 and was 4.4% ahead of the previous high.
The growth in rooms revenue in July was supported by a year-on-year increase in non-rooms revenues, including food & beverage (+0.4%) on a per available room basis. However, further TRevPAR growth was hampered by a 0.6% decline in conference & banqueting revenue.
In addition to the growth in revenue, hotels in the UK successfully recorded a 0.6-percentage-point saving in payroll, which fell to 24.8% of total revenue.
As a result of the movement in revenue and costs, profit per room at hotels in the UK increased by 7.2% year-on-year to £71.10. Whilst this was not a record, it did equal the profit performance of September 2017.
Profit & Loss Key Performance Indicators – Total UK (in GBP)
July 2018 v July 2017
RevPAR: +7.9% to £114.34
TRevPAR: +5.6% to £162.48
Payroll: -0.6 pts to 24.8%
GOPPAR: +7.2% to £71.10
The robust demand levels were led by the leisure segment, which accounted for 36% of accommodated roomnights this month, well above the annual average of 31.9% for the 12 months to July 2018.
Growth was also supported by increases in the achieved rate in the commercial segment, including the corporate (+3.5%) and residential conference (+11.9%) sectors.
“July is not historically a month during which UK hoteliers would expect to be achieving a TRevPAR high. However, soaring demand levels, which have primarily been led by the leisure segment have helped hotels to drive top line revenues in this month over the last couple of years,” said Pablo Alonso, CEO of HotStats.
“The strength of demand has been attributed to an uplift in staycations since the Brexit vote, as well as an increase in international visitors to the UK. The improvement will be to the delight of hotel owners and operators as July presents an opportunity to drive revenue and profit which previously did not exist.”
The growth in top- and bottom-line performance for hotels in the UK in July was mirrored and exceeded by hotels in London, which recorded a 12.8% year-on-year increase in profit per room, which soared to a high of £115.00.
This was almost 45% above the GOPPAR level recorded at hotels in London for year-to-date 2018 at £79.52 and was well ahead of the previous high recorded in September 2017 at £107.64.
The year-on-year growth in profit per room was led by a 9.9% increase in TRevPAR, which grew to £226.79, as a 12.5% increase in RevPAR was supported by increases in non-rooms revenues, including food & beverage (+1.7%) and leisure (+0.6%) on a per available room basis.
In line with the total UK market, hotels in London recorded a year-on-year decline in revenue in the conference & banqueting department (-5.0%), further illustrating that accommodation demand this month was driven by the leisure segment.
In addition to the uplift in revenue, hotels in London recorded a 1.3-percentage-point saving in payroll, which fell to just 21.3% of total revenue and contributed to profit conversion climbing to a healthy 50.7% of total revenue.
Profit & Loss Key Performance Indicators – London (in GBP)
July 2018 v July 2017
RevPAR: +12.5% to £178.57
TRevPAR: +9.9% to £226.79
Payroll: -1.3 pts to 21.3%
GOPPAR: +12.8% to £115.00
The growth in top- and bottom-line performance for hotels in London was led by volume, with room occupancy soaring by 4.7-percentage points to a lofty 92.1%. In addition, achieved average room rate increased by 6.7% year-on-year to hit a high of £193.90.
“Wimbledon, the Hampton Court Flower Show, the Pride Parade and the British Summertime Festival in Hyde Park, coupled with buoyant domestic and international visitor numbers, helped drive record profit performance for hotels in London in July,” said Alonso.
Hopefully, properties in the capital can maintain this positive performance to offset the GOPPAR decline so far this year.”
Despite the overall increase in visitor numbers to the UK, hotels in leisure-led Stratford-upon-Avon continued to suffer a decline across all performance metrics in July, which was punctuated by a 10.9% decrease in profit per room, which fell to £42.54. This represented a sixth consecutive month of year-on-year profit decline for hotels in the town.
Whilst hotels in Stratford-upon-Avon successfully recorded an increase in volume this month, with room occupancy increasing by 1.8-percentage points, to 81.8%, this was cancelled out by a 2.4% decline in achieved average room rate, which fell to £92.24 and equated to a year-on-year RevPAR dip by -0.3% in July to £75.27.
In addition to the drop in rooms revenue, hotels in the birthplace of Shakespeare suffered a drop in non-rooms revenue, which contributed to the 6.7% decline in TRevPAR to £124.51.
Whilst a further increase in payroll levels to 31.6% of total revenue meant profit conversion at hotels in Stratford-upon-Avon fell to 34.2% of total revenue in July, this remained above the conversion for year-to-date 2018 at 27.5%.
Profit & Loss Key Performance Indicators – Stratford-upon-Avon (in GBP)
July 2018 v July 2017
RevPAR: -0.3% to £75.27
TRevPAR: -6.7% to £124.51
Payroll: +1.3 pts to 31.6%
GOPPAR: -10.9% to £42.54
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