UK Market Spotlight
Monthly Trends: United Kingdom Hotel Market Performance (Year to Date 2023 vs Year to Date 2022 & 2019)
In the latest updates on the regional market performance of the hotel industry in the United Kingdom, we share year-to-date data from May for 2023 compared to the same period in 2022 and 2019, according to HotStats’ monthly Hotel Benchmarking reports.
TrevPAR (Total Revenue per Available Room): TrevPAR has seen an impressive year-on-year growth of 40% in 2023, surpassing the levels achieved in 2019 by 2%.
Occupancy (Occ): While there is still a gap in occupancy compared to 2019, there has been a significant improvement of 15 percentage points compared to the previous year reflecting rising demand levels.
TrevPOR (Total Revenue per Occupied Room): TrevPOR has shown a moderate increase of 7% in 2023 boosted by ADR increases but declines in F&B revenues have been a drag on this measure.
ADR (Average Daily Rate): The Average Daily Rate has experienced a solid growth of 10% in 2023, which exceeds slightly current inflation rates.
F&B (Food and Beverage): The F&B segment has faced a slight decline of 5% in 2023. However, compared to 2019, there has been a positive growth of 56% in the Conference and Banqueting (C&B) segment.
Spa: The Spa segment has recorded a decline of 6% in 2023 possibly reflecting a cautionary approach to discretionary spend by consumers.
Cancellations and Golf: Cancellations and Golf have remained relatively flat.
Labour: Labour rates initially stabilised towards the end of 2022, but they began to rise again in Q1 of 2023 due to inflation and living wage reviews.
F&B Profit: While F&B profit has seen a slight increase, it remains 10 percentage points down compared to 2019, highlighting the ongoing challenges faced by hoteliers in this segment.
Winter Challenges and Utilities: Despite significant rate growth, the winter season proved to be challenging for UK hoteliers, with utilities emerging as a key issue. Utilities accounted for 9% of total revenue, reflecting the impact of rising utility costs.
GOP (Gross Operating Profit): Gross Operating Profit has increased by 3 percentage points in 2023. However, it remains 4 percentage points lower than the levels achieved in 2019, reflecting the increases in labour and utility costs in particular.
In summary, the United Kingdom hotel market has shown promising signs of recovery in 2023 compared to 2019. There has been significant growth in TrevPAR, ADR, and C&B, indicating improved revenue generation. However, challenges in F&B, Spa, and labor costs continue to impact profitability. The rise in utilities costs and the gap in GOP compared to 2019 highlight the ongoing recovery process for the UK hotel industry. Read more how P&L benchmarking can help boost hotel performance in your region here.