LONDON, England – Profit per room at hotels in York has plunged by 41.5% in the first two months of 2016, with a 16.2% year-on-year drop recorded in the month of February alone, according to the latest data from HotStats.
Whilst hotels were able to successfully record RevPAR (Revenue per Available Room) growth of 1.3% in February, TrevPAR (Total Revenue per Available Room) in the city dropped by 1.1%, as Food & Beverage revenue fell by 3.6% and an 18.7% year-on-year decline in revenue was recorded in Conference & Banqueting. For hotels in York, the drop in TrevPAR was further exacerbated by year-on-year cost increases on a per available room basis in payroll (+6.6%) and Sales & Marketing expenses (+17.1%), as well as Property & Maintenance payroll (+23.8%), as repairs to flood-damaged hotels continued.
York was one of the cities worst hit in the floods of December 2015. However, occupancy levels in the city have been on the decline for the last year, falling by 6.1 percentage points, to 76.6% in the 12 months to February 2016, from 82.7% in the 12 months to February 2015, with the decline accelerating since the December floods. The drop in occupancy has contributed to a slow and steady fall in RevPAR over the last year, alongside unrelenting growth in labor costs, which have increased by 14.0% over the last three years, from £29.97 per available room in the 12 months to March 2013 to £34.17 in the 12 months to February 2016.
On a rolling 12-month basis, GOPPAR (Gross Operating Profit per Available Room) has fallen from a high of £36.41 recorded in February 2015 and is now 16.4% behind this level, at £30.42 for the 12 months to February 2016.
RevPAR Slows But Profit Grows for Hotels in the Eastern Region
For the first time in almost three years, RevPAR at hotels in the Eastern region is showing signs of stabilizing, after 30 months of consecutive growth fuelled a 21.3% increase in rooms revenue, to £55.16 in the 12 months to February 2016 from £45.46 in the 12 months to August 2013.
Whilst, for the month, year-on-year RevPAR remained stable, TrevPAR fell by 3.0% as overall revenue levels were challenged by a 16.7% drop in Conference & Banqueting revenue and an 8.8% decline in Food & Beverage revenue.
Year-on-year profit for the month increased by 1.8% as hotels in the Eastern region managed down payroll (-4.5%) and overheads (-4.5%) on a per available room basis, which contributed to a 6.6% year-on-year profit increase so far in 2016.
Hotels in Birmingham Continue to Achieve Top and Bottom Line Growth into 2016
RevPAR levels for Birmingham hotels reached new heights this month, at £54.67 in the 12 months to February 2016, having achieved consistent growth from £47.84 in the 12 months to August 2014.
Whilst occupancy slipped a little, year-on-year, RevPAR, increased by 4.8% for the month to £61.14 from £58.32 during the same period in 2015, but was fuelled by a 25.8% increase in Rooms Costs of Sales, to 10.8% of rooms revenue.
Growth in Food & Beverage revenue (+2.3%), as well as Conference & Banqueting (+12.0%) contributed at a 2.7% increase in TrevPAR for the month, to £92.77 from £90.31 during the same period in 2015.
Whilst payroll on a per available room basis increased by 2.0% for the month of February, profit growth remains positive for Birmingham hoteliers so far in 2016, with a 1.2% increase for the month and a 0.5% year-to-date increase.