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May 2017 was mixed bag for UK chain hotels

, May 2017 was mixed bag for UK chain hotels, Buzz travel | eTurboNews |Travel News

Hotels in Bristol recorded a 19.8 percent increase in profit per room this month, which is more than double the growth in the Provincial UK as the city buzzed with activity, according to the latest data.

Whilst hotels polled in both Bristol and the Regional UK recorded an 8.2 percent increase in RevPAR (Revenue per Available Room) for the month, at £90.07, the achieved rate at hotels in the South West city was more 5.1 percent above the Regional performance (£85.70).

Robust increases in top line performance were helped by year-on-year growth across most market segments and bolstered by a range of events, including the 3rd largest 10k race in the UK, with 13,000 participants, the ‘Love Saves the Day’ festival and VegFest, which all contributed to the 2.7 percentage point increase in room occupancy and the 4.5 percent year-on-year increase in achieved average room rate.

However, it was via cost cutting measures that Bristol hoteliers have shown themselves to be most shrewd, illustrated by their ability to convert a 7.7 percent increase in TrevPAR (Total Revenue per Available Room) to a 19.8 per cent increase in profit per room. This is compared to the 8.5 percent increase in profit per room at the overall Provincial UK market, on the back of a 5.9 percent increase in TrevPAR.

The astute cost cutting was further exemplified by the 2.3 percentage point year-on-year drop in payroll this month, which fell to 29.0 percent of total revenue and helped to drive a 35.3 percent profit conversion.

Huge Occupancy Growth for Aberdeen Hotels Fails to Reach the Bottom Line

Despite recording a 6.5 percentage point year-on-year increase in room occupancy this month, hotels in Aberdeen still suffered a 2.8 percent decline in profit per room.

Whilst the significant increase in room occupancy this month, to 72.0 percent, was almost entirely wiped out by an 8.7 per cent decline in achieved average room rate, to £61.85, Aberdeen hoteliers clung on to achieve a 0.4 percent increase in RevPAR, to £44.55.

Due, in part, to the uplift in volume, TrevPAR at hotels in Aberdeen increased by 1.7 percent year-on-year, to £71.06, helped by a 4.5 percent increase in Food & Beverage revenue per available room, to £20.80.

However, the positive TrevPAR story this month belies the continuing challenges to profitability, which begin in the Rooms Department, where Rooms Cost of Sales increased by 14.8 percent year-on-year, to £3.87 per available room, equivalent to 8.9 percent of Rooms Revenue.

In addition, with a 3.7 percent increase in Rooms Payroll and a 10.3 percent increase in Rooms Expenses, it is unsurprising that Rooms Department Profit dropped by 3.0 percent year-on-year, to £29.26.

Overall, profit per room at Aberdeen hotels fell to £17.57 this month, which was in spite of a 0.4 percentage point saving in total Payroll, to 33.0 percent.

North East Hoteliers Caught Out by Creeping Costs

Profit per room at hotels in the North East declined by 4.8 percent this month due to increases in key costs, including Payroll (+2.6 percent) and Overheads (+2.8 percent) on a per available room basis.

The decline was in spite of a 1.1 percent increase in RevPAR as hotels in the region benefited from a 2.2 percentage point increase in occupancy, which offset the 1.7 percent average room rate decline, to £73.52.

The decline this month is in contrast to the reasonably strong start to the year for hotels in the North East, illustrated by the 3.7 percent year-to-date increase in RevPAR, which contributed to the 2.6 percent year-to-date increase in profit per room.

However, HotStats data suggests that the achieved average room rate at hotels in the North East is under pressure, with declines this month recorded across key segments, including Best Available Rate (-6.3 percent), Corporate (-0.9 percent) and Leisure (-3.8 percent).

, May 2017 was mixed bag for UK chain hotels, Buzz travel | eTurboNews |Travel News

Author: Chief Assignment Editor

Chief Assignment Duty Editor based in Honolulu

, May 2017 was mixed bag for UK chain hotels, Buzz travel | eTurboNews |Travel News