Europe GOPPAR Suffers in April on TRevPAR Skid

Profit per room at hotels in mainland Europe fell for a fifth consecutive month in April, as revenue levels continued to weaken across all departments, according to the latest data tracking full-service hotels from HotStats.GOPPAR fell 8.4 percent year-over-year.

In addition to a 1.2-percent decrease in RevPAR to €114.51, hotels in the region recorded a 7.4-percent decline in ancillary revenues this month to €53.96.

This was led by a year-on-year drop in Food & Beverage (down 8.4 percent) and Conference & Banqueting (down 16.6 percent) revenue, on a per-available-room basis.

Whilst TRevPAR has showed signs of greater resilience, this is now the second consecutive month of decline in this measure, which fell by 3.4 percent to €168.47.

Although this was a high for 2019, it was 3.9 percent behind the TRevPAR for the rolling 12 months to April 2019 at €175.23.

On a positive note, payroll levels fell by 0.5 percent to €56.90 on a per-available-room basis. This was the first time hotels in the region have recorded a saving in this measure since December 2016.

As a result of the movement in revenue and costs, this was the second-largest drop in profit in 2019 following the 10.0-percent YOY decline in January.

Profit & Loss Key Performance Indicators – Mainland Europe (in EUR)

After 25 months of almost consistent growth, profit per room at hotels in mainland Europe is now deteriorating as revenues slide and costs escalate. The pace of decline is worrisome with GOPPAR back at August 2018 levels.
—Michael Grove, Director of Hotel Intelligence, EMEA, HotStats

In line with the challenges facing the region, it was a tough month for hotels in Stockholm, as profit per room fell by 21.3 percent YOY to €59.21.

As the days continue to lengthen, hotels in Stockholm typically see an improvement in top- and bottom-line hotel performance. However, this has not been the case in 2019, as profit per room in April was 5.7 percent lower than in March.  

The decline in profit was on the back of a 10.6-percent drop in RevPAR, as achieved average room rate crashed by 13.0 percent to €140.44. It was further hit by a 12.6-percent decrease in ancillary revenues to €67.81. 

Profit & Loss Key Performance Indicators – Stockholm (EUR)

Although hotels in Bucharest performed well this month, profit levels in the Romanian capital were pierced by a 17.3-percent increase in payroll to €31.17. This figure, however, remains relatively low, equivalent to just 23.6 of total revenue.

Hotels in Bucharest continue to perform well, which is in spite of room occupancy falling, illustrated by the 5.6-percentage-point drop this month to 74.6 percent.

However, this was alleviated by a 17.2-percent increase in ADR, which grew to €118.18, as the city hosted a packed programme of conferences.

The 8.9-percent increase in RevPAR to €88.14 was assisted by growth in ancillary revenues, which fuelled an 8.1-percent increase in TRevPAR to €131.85.

And, in spite of the significant cost increase, GOPPAR at hotels in Bucharest grew by 3.6 percent this month, to €60.62.

Profit & Loss Key Performance Indicators – Bucharest (EUR)