European Chain Hotels Market Review released

The 5.9% drop in profit in the Rooms department at Amsterdam hotels this month was due to a 2.8% decline in Rooms Revenue, as well as rising costs, according to the latest data from HotStats.

The 5.9% drop in profit in the Rooms department at Amsterdam hotels this month was due to a 2.8% decline in Rooms Revenue, as well as rising costs, according to the latest data from HotStats.

Whilst hotels in Amsterdam were able to maintain room occupancy levels in November, at a lofty 80.9%, a 2.9% decline in achieved average room rate was directly responsible for RevPAR (Revenue per Available Room) dropping to โ‚ฌ135.06.


The decline in RevPAR was in spite of the best efforts of Amsterdam hoteliers to drive demand via Online Travel Agents, evidenced by the 21.8% increase in Rooms Cost of Sales, to โ‚ฌ7.31. However, the increase in this cost, as well as a 2.8% increase in Rooms Payroll, to โ‚ฌ21.88 per available room, led to Rooms profit per room at Amsterdam hotels falling by 5.9% to โ‚ฌ92.77 in November.

The performance of Amsterdam hotels this month reflects year-to-date trends. Despite RevPAR for the 11 months broadly remaining stable at โ‚ฌ144.86, rising costs have resulted in Rooms profit conversion falling to 71.9% of Rooms revenue from 72.8% in 2015.

Commercial Demand Drives Strong Profit Growth for Prague Hotels

Hotels in Prague recorded a 32.5% increase in profit per room this month with top and bottom line performance being driven by demand from the commercial segment.

In addition to a 2.7% increase in achieved average room rate, to โ‚ฌ91.12, RevPAR at hotels in the Czech capital was driven by a 7.3 percentage point increase in room occupancy, to 76.2%. This was not only due to in-house events at hotels polled, but also events at the Prague Conference Centre, which included the ECREA communication conference, which hosted more than 1,400 delegates.

The particularly strong month for the commercial sector was reflected by corporate and residential conference demand comprising more than 40.0% of total roomnights sold, compared to an average of 33.0% for year-to-date 2016; with strong rate growth achieved in both the corporate (+5.3%) and residential conference (+4.8%) segments.

In addition to the increase in RevPAR, year-on-year growth for the month was also recorded in ancillary departments, including Food and Beverage (+23.9%) and Conference and Banqueting (+46.5%), which fuelled a 16.0% increase in TRevPAR (Total Revenue per Available Room) to โ‚ฌ123.03.

Despite increases in both Payroll (+4.6%) and Overheads (+1.4%) on a per available room basis, hotels in Prague achieved a 32.5% increase in profit per room this month, to โ‚ฌ51.71.

Warsaw Hotels Set for Second Consecutive Year of Strong Profit Growth

A 15.4% increase in profit per room this month has helped secure a second consecutive year of strong profit growth for hotels in Warsaw following the 6.0% profit increase in 2015.

Although hotels in Warsaw have recorded a 0.9 percentage point decline in room occupancy for year-to-date 2016, this has been more than offset by the 11.1% increase in achieved average room rate, which has fuelled a 9.9% increase in RevPAR, to โ‚ฌ76.13.

Whilst growth in the commercial segment has been strong, illustrated by a rate increase in both the corporate (+12.8%) and residential conference (+10.9%) segments, rate growth has been primarily through the individual leisure segment, which increased by 21.9% for year-to-date 2016, to โ‚ฌ90.22.

Year-to-date 2016, the profit per room increase at hotels in the Polish capital has been recorded at 10.0%, to โ‚ฌ50.42, equivalent to a 43.0% profit conversion, one of the highest of all the European cities polled. The growth is in spite of increasing costs, including Payroll (+3.1%) and Overheads (+3.9%) on a per available room basis.

European Chain Hotels Market Review released

LONDON, England – HotStats released July 2016 European Chain Hotels Market Review today.

Profit Levels at Berlin Hotels Hit by Creeping Costs

LONDON, England – HotStats released July 2016 European Chain Hotels Market Review today.

Profit Levels at Berlin Hotels Hit by Creeping Costs

Whilst total revenue levels at Berlin hotels fell by 8.3% this month, creeping costs in the German capital contributed to an 18.8% year-on-year drop in profit, according to the latest data from HotStats.

Despite a packed summer schedule in the city, which included the six-day Classic Open Air Festival and Berlin Fashion Week, occupancy for Berlin hotels fell by 5.0 percentage points year-on-year to 80.1%, which in addition to a 2.6% decline in achieved average room rate, contributed to an 8.4% year-on-year decline in RevPAR (Revenue per Available Room).


And with declining revenue levels recorded in ancillary departments, including Food and Beverage (-6.6%) and Conference and Banqueting (-2.3%), Berlin hotels suffered an 8.3% decrease in TrevPAR (Total Revenue per Available Room) to โ‚ฌ139.59.

Despite successfully reducing costs on a per available room basis, hotels in Berlin suffered increases in both payroll (+1.8 percentage points) and overheads (+0.6 percentage points) as a percentage of total revenue.

As a result of the movement in revenue and costs, profit conversion at Berlin hotels fell to just 21.5% of total revenue this month. This is a trend that Berlin hotels have been struggling with throughout 2016, as despite RevPAR declining by just 0.6% year-to-date, to โ‚ฌ106.71, profit per room has fallen by 3.1% to โ‚ฌ47.25 on a per available room basis.

Rate Gain Fails to Offset Occupancy Decline as Profit Drops at Madrid Hotels

In contrast to most months for year-to-date 2016, the increase in achieved average room rate at hotels in Madrid in July was not sufficient to offset the drop in room occupancy, which contributed to a 10.2% decline in profit per room for the month.

Year-to-date 2016, Madrid hotels have been able to strategically drive price at the expense of volume, in order to achieve a 1.9% increase in RevPAR, to โ‚ฌ101.14. In turn, this has contributed to a 1.2% year-on-year increase in TrevPAR to โ‚ฌ147.68.

However, this month the 3.0% decline in RevPAR was accompanied by a drop in ancillary revenues, including Food and Beverage (-12.2%) and Conference and Banqueting (-31.4%), which led to a 5.2% drop in TrevPAR.

As a result of the decline in revenue and increasing costs, year-on-year profit per room for the month fell by 10.2%. However, this was not sufficient to damage year-to-date 2016 performance, with hotels in Madrid recording a 5.0% increase in GOPPAR (Gross Operating Profit per Available Room) to โ‚ฌ48.79.

Rising Costs Challenging Ancillary Department Profit for Prague Hoteliers

Despite hotels in Prague achieving a year-on-year GOPPAR increase of 1.9% in July, the increase was almost entirely due to growth in the Rooms department as significant profit declines were recorded in the Food and Beverage (-20.0%) and Leisure (-21.9%) departments.

Hotels in Prague successfully recorded a 2.3% increase in RevPAR for July, to โ‚ฌ76.34, as a 0.9 percentage point decline in occupancy was offset by a 3.3% increase in achieved average room rate, which contributed to a 2.2% increase in Rooms department profit per room.

However, an 8.3% year-on-year decline in revenue in the Food & Beverage department was further exacerbated by an increase in both cost of sales (+29.6%) and payroll (+7.5%), which contributed to the 20.0% year-on-year decline in departmental profit.

The picture for the leisure department was even more challenging, with a 31.3% increase in revenue cancelled out entirely by an increase in cost of sales (+14.3%) and payroll (+121.4%), which contributed to the 21.9% drop in Leisure department profit per room.

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Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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