Monthly TrendsDemand from the commercial segment accounted for more than 40 percent of accommodated roomnights in November and helped fuel a 5.2-percent year-on-year increase in profit per room for hotels across Europe, according to the latest data tracking full-service hotels from HotStats.
November was another month of robust profit growth for hotels in the region, with year-to-date GOPPAR at 9.5 percent above the same period in 2017.
This was the 10th month of profit growth in 2018, with the only blip suffered in May, and, absent a complete collapse in December, hotels in Europe are set to record another huge profit increase in 2018, following the 8.9-percent increase in 2017.
Profit per room at hotels in Europe has now grown by almost 20 percent over the last 24 months to €64.57 in the rolling 12 months to November 2018, from €53.99 during the same period in 2015/2016.
Profit growth in the month was led by significant YOY increases in revenue, which included an uplift in Rooms (up 5.6 percent) and Food & Beverage (up 1.4 percent) revenue, on a per-available-room basis; in spite of a decline in Conference & Banqueting (down 0.1 percent) and Leisure (down 6.1 percent) revenue.
As a result, TRevPAR increased by 3.9 percent in November to €168.83. Growth in rooms revenue in the month was led by a 4.7-percent increase in achieved average room rate and supported by a 0.6-percentage-point increase in room occupancy.
In addition to accounting for more than 40 percent of demand, the commercial segment fuelled the increase in average room rate and included a YOY uplift in both the Residential Conference (up 3.8 percent) and Corporate (up 0.8 percent) segments.
Profit & Loss Key Performance Indicators – Europe (in EUR)
| November 2018 v. November 2017 |
| RevPAR: +5.6% to €106.22 |
| TRevPAR: +3.9% to €168.83 |
| Payroll: -0.2 pts. to 35.5% |
| GOPPAR: +5.2% to €52.56 |
Once again, the growth in revenue in Europe this month was supported by cost savings, which included a 0.2-percentage-point reduction in payroll to 35.5 percent of total revenue. Profit conversion was recorded at a healthy 31.1 percent of total revenue.
2018 has been a hugely positive story for hotels in Europe with record revenue and profit levels being driven by volume, which continues to reach new heights. And this is all in spite of an increasingly challenging economic picture in the region.
—Michael Grove, Director of Intelligence, EMEA, HotStats
For hotels in Brussels, November was another month of excellent top- and bottom-line performance, as profit per room grew by 25.1 percent YOY and hit a high for 2018 at €71.16. This was 47 percent above the GOPPAR levels for year-to-date 2018 at €48.51. Profit growth at hotels in the Belgian capital has now maintained an upward trajectory for the last 24 months.
Year-over-year increase in RevPAR at hotels in Brussels was led by growth in room occupancy levels, which grew by a healthy 5.7 percentage points to 81.6 percent, and a 3.7-percent increase in achieved average room rate to €161.68.
Since Brexit negotiations began 24 months ago, RevPAR levels at hotels in Brussels have increased by almost €30 to €110.13 in the rolling 12 months to November 2018. During the same period, profit per room has almost doubled to €46.71.
Whilst the ongoing revenue growth has enabled hotels in Brussels to reduce payroll levels, which month fell by 3.5 percentage points in November, they remain relatively high at 35.1 percent of total revenue. Despite this, profit conversion this month remained strong at 38.2 percent of total revenue.
Profit & Loss Key Performance Indicators – Brussels (in EUR)
| November 2018 v. November 2017 |
| RevPAR: +11.5% to €131.91 |
| TrevPAR: +5.5% to €186.40 |
| Payroll: -3.5 pts. to 35.1% |
| GOPPAR: +25.1% to €71.16 |
In line with the growth in Brussels, profit increases in Dublin continue unabated, with GOPPAR growth now recorded at 68.4 percent over the last 36 months, hitting €96.51 in the 12 months to November 2018.
For the month of November, profit per room grew by 9.8 percent year-on-year to €83.13 and was the ninth consecutive month of profit growth for hotels in the Irish capital.
The growth in profit this month was driven by revenue increases across all departments, but led by growth in RevPAR, which increased by 9.2 percent YOY to €139.95, as room occupancy hit a lofty 83.3 percent and achieved average room rate grew to €167.95.
Increasing revenues were complemented by falling costs, which included a 0.9-percentage-point decrease in payroll to 30.8 percent of total revenue and contributed to the ongoing positive story for Dublin hoteliers in the month.
Profit & Loss Key Performance Indicators – Dublin (in EUR)
| November 2018 v. November 2017 |
| RevPAR: +9.2% to €139.95 |
| TrevPAR: +7.0% to €227.81 |
| Payroll: -0.9 pts. to 30.8% |
| GOPPAR: +9.8% to €83.13 |
Glossary:
Occupancy (%) – Is that proportion of the bedrooms available during the period which are occupied during the period.
Average Room Rate (ARR) – Is the total bedroom revenue for the period divided by the total bedrooms occupied during the period.
Room Revpar (RevPAR) – Is the total bedroom revenue for the period divided by the total available rooms during the period.
Total Revpar (TRevPAR) – Is the combined total of all revenues divided by the total available rooms during the period.
Payroll % – Is the payroll for all hotels in the sample as a percentage of total revenue.
GOP PAR – Is the Total Gross Operating Profit for the period divided by the total available rooms during the period.
