August 2017: Leisure Demand Helps Maintain Profit Growth at UK Hotels Despite a slowing in…
July 28, 2017 11:10 am
GOPPAR at hotels in the UK increased by 5.4% this month, in spite of the heightened uncertainty across the country as the snap general election ended in yet another hung parliament, according to the latest worldwide poll of full-service hotels from HotStats.
The year-on-year growth in GOPPAR this month was fuelled by a 6.2% increase in RevPAR, as hotels in the UK recorded a 0.6 percentage point increase in room occupancy, to 82.7%, as well as a 5.4% year-on-year uplift in achieved average room rate, to £122.23.
In addition to the uplift in RevPAR, hotels in the UK recorded a 0.7% increase in Food and Beverage revenue, to £42.31 per available room, which contributed to the 4.5% increase in TrevPAR.
Profit & Loss Key Performance Indicators – Total UK (in GBP)
June 2017 v June 2016
RevPAR: +6.2% to £101.05
TrevPAR: +4.5% to £153.86
Payroll: – 0.2 pts to 25.7%
GOPPAR: +5.4% to £65.24
Cost savings, which included a 0.2 percentage point reduction in Payroll, to 25.7% of total revenue, enabled a high flow through from the top line to the bottom line and hotels in the UK subsequently achieved a 5.4% increase in GOPPAR, to £65.24.
“The UK hotel market would have been forgiven for stumbling a little in the messy aftermath of 8 June. However, the strong economic fundamentals of the UK remain and the hotel sector is buoyant, illustrated by the continued upward trajectory this month,” said Pablo Alonso, CEO of HotStats.
Hotels in London continued to perform strongly in June, with a 6.0% increase in GOPPAR for the month contributing to the 13.9% year-on-year profit per room increase for year-to-date 2017, to £75.15.
The potential impact on hotel performance from terrorist-related activity in the capital at the beginning of the month was more than offset by the 30,000-strong attendance at IFSEC International 2017 at ExCeL.
Furthermore, the capital continues to benefit from the drop in the value of Sterling following the Brexit vote this time last year, with both business and leisure visitors arriving in increasing numbers from major source markets such as North America and Europe.
Profit & Loss Key Performance Indicators – London (in GBP)
June 2017 v June 2016
RevPAR: +6.3% to £144.46
TrevPAR: +4.4% to £195.07
Payroll: – 0.2 pts to 22.8%
GOPPAR: +6.0% to £95.32
Despite declines in Food and Beverage (-1.9%) and Conference and Banqueting (-5.8%) revenue at hotels in London in June, a 6.3% increase in RevPAR supported a 4.4% increase in TrevPAR, to £195.07.
“UK hoteliers are currently enjoying the benefits of Brexit, which has fuelled a record number of overseas visitors to the UK. The high demand levels have enabled room rates to be leveraged in the Individual Leisure, Group Leisure and Best Available Rate segments, with the rate premium flowing through to profit. This is great news for hotel owners and operators across the UK,” added Pablo.
Cardiff hotels were amongst the best performing in the UK in June, after hosting another highly successful major event. GOPPAR soared by 34.6% year-on-year this month as the 2017 Champions League Final between Juventus and Real Madrid took place in the Millennium Stadium.
In addition to the 21.6% uplift in Rooms Revenue, the high volume of visitors to the Welsh capital fuelled an 18.6% increase in TrevPAR, to £132.82, with significant increases recorded in non-rooms revenues, including Food (+11.3%) and Beverage (+11.8%).
Profit & Loss Key Performance Indicators – Cardiff (in GBP)
June 2017 v June 2016
RevPAR: +21.6% to £82.61
TrevPAR: +18.6% to £132.82
Payroll: – 2.4pts to 26.5%
GOPPAR: +34.6% to £51.43
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.
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