According to a latest report by HotStats, Dublin hotels continue to drive a huge profit growth in May.
Hotels in Dublin recorded a 26.2% year-on-year increase in profit per room in May driven by continued significant top line growth, according to the latest data from HotStats.
On the back of record visitor numbers and spend as well as significant year-on-year GDP growth in 2015, the demand profile of Dublin continues to be positive in 2016, enabling hotels in the Irish capital to record particularly high room occupancy levels, averaging 84.9% in the 12 months to May 2016.
As a result, hoteliers have been able to leverage volume to drive significant average room rate growth, which has meant RevPAR (Revenue per Available Room) in Dublin has now increased by almost 43.0% in the last 36 months, to €128.35 in the 12 months to May 2016 from €89.84 in the 12 months to June 2013.
Revenue growth has been recorded across all departments in May, driving a 14.2% increase in TrevPAR (Total Revenue per Available Room) for the month and a 16.1% year-to-date increase.
Whilst hotels in Dublin continue to drive top line performance via third party intermediaries, such as booking.com, with Rooms Cost of Sales increasing by 29.8% year-on-year to €10.80 or 6.9% of rooms revenue, as well as recording increases in both labour (+4.0%) and overheads (+4.4%), year-to-date profit per room has increased by 35.2%.
Profit Increase Recorded at Frankfurt Hotels Despite Revenue Drop
Frankfurt hotels successfully recorded a 0.8% increase in profit per room in May, which was in spite of a 0.4% decline in total revenue to €150.53.
Whilst hotels in the German city recorded a 3.7% increase in RevPAR, a 9.5% decline in Food and Beverage revenue in addition to a 17.6% drop in Conference and Banqueting revenue contributed to the fall in TrevPAR.
However, astute management, which included a reduction in property and maintenance (-12.2%) and utility (-3.4%) costs on a per available room basis offset the decline in total revenue, enabling hotels in Frankfurt to record a profit increase, to €50.46, equivalent to a 33.5% profit conversion.
Profit per Room Plummets at Istanbul Hotels as Terror Attacks Escalate
Headline performance at hotels in Istanbul has been decimated in recent months as the number of terror-related incidents in the city has increased. The shift in the profile of the Turkish city’s hotel market away from a position of stability and growth has been stark and sadly, terrorist attacks in the city have become a regular occurrence with incidents taking place in January, March, April and May 2016.
Unsurprisingly, the volume of business and leisure visitors to the city has plummeted, reflected in the 22.0 percentage point decline in room occupancy in May, which contributed to the 18.9 percentage point year-to-date decline to 47.7%.
Headline performance at hotels in Istanbul began its decline in August 2015 in line with the increase in terror activity. As a result, on a rolling 12-month basis, RevPAR in the city has fallen by 15.6 % in less than a year, from a high of €85.85 in the 12 months to August 2015 to €72.50 in the 12 months to May 2016, with the decline accelerating since the turn of the year due to the more significant and well publicised attacks in January and March.
Reactive management has meant hotels in Istanbul have managed to reduce labour (-9.7%) and overhead (-12.3%) costs on a per available room basis, but as a result of the decline in revenue, year-on-year profit per room at hotels in Istanbul plummeted by 50.0% in May and 60.0% year-to-date.
The hotels profiled in this report are drawn from the HotStats database and reflect the portfolios and distribution of the hotel chains that we survey and which operate primarily in the four and five-star sectors.