Hotels in Europe recorded a 3.6% increase in GOPPAR this month, with hotels in Budapest leading the way with a 27.1% year-on-year increase in profit per room, according to the latest worldwide poll of full-service hotels.
A 0.4 percentage point year-on-year decline in room occupancy at hotels in Europe in June, to 78.7%, was more than offset by the 4.9% increase in achieved average room rate, to โฌ180.04, fuelling a 4.4% increase in RevPAR.
In addition to the growth in Rooms Revenue, hotels in Europe recorded a 0.5% increase in Food and Beverage revenue, to โฌ36.61 per available room, which contributed to the 2.9% increase in TrevPAR, to โฌ208.84.
Profit & Loss Key Performance Indicators โ Europe (in EUR)
June 2017 v June 2016
RevPAR: +4.4% to โฌ141.75
TrevPAR: +2.9% to โฌ208.84
Payroll: – 0.1 pts to 29.6%
GOPPAR: +3.6% to โฌ85.55
The growth in top line performance, which was primarily driven through rate, was further supported by cost savings, which included a 0.1 percentage point reduction in Payroll to 29.6% of total revenue, and enabled hotels in Europe to record a 3.6% increase in GOPPAR, to โฌ85.55.
The GOPPAR growth in June contributed to the year-to-date increase in profit per room of 8.2%, to โฌ53.81. This is equivalent to a profit conversion of 32.4% of total revenue at hotels in Europe for H1 2017.
โHotels in Europe have had a good first half of the year and consumer confidence will be buoyed with the IMF recently upgrading its 2017 growth projections for many EU countries, including France, Germany, Italy, and Spain, on the back of Q1 growth exceeding expectations,โ said Pablo Alonso, CEO of HotStats.
One of the top performing hotel markets in Europe this month was Budapest, which recorded a 27.1% year-on-year increase in GOPPAR on the back of a 23.4% uplift in RevPAR. The growth in Rooms Revenue was primarily driven by a 17.6% increase in achieved average room rate, to โฌ142.41, as occupancy hit 85.3%.
Whilst Budapest has experienced a significant uplift in leisure tourists to the city, this month growth was fuelled by business visitors, as the Hungarian capital continues to establish its profile as a destination for MICE. The strong commercial demand levels fuelled an uplift in rate in both the corporate (+25.9%) and residential conference (+13.0%) segments.
A reduction in Payroll levels, to just 21.5% of total revenue enabled hotels in Budapest to achieve a punchy profit conversion of 47.7% of total revenue for the month.
Profit & Loss Key Performance Indicators โ Budapest (in EUR)
June 2017 v June 2016
RevPAR: +23.4% to โฌ121.51
TrevPAR: +19.2% to โฌ164.49
Payroll: – 1.0 pts to 21.5%
GOPPAR: +27.1% to โฌ78.51
โWhilst a lack of supply and burgeoning demand levels has enabled hotels in Budapest to drive a 46% increase in RevPAR over the last 36 months, it is noteworthy that astute hoteliers have leveraged this into a 60% increase in GOPPAR during the same period,โ added Pablo.
June was also a strong month of performance for hotels in Paris, which recorded an 8.1% increase in GOPPAR on the back of a 4.2% increase in TrevPAR. The year-on-year growth in profit per room this month was helped by the biennial Paris Air Show.
Further to the 40.7% year-on-year drop in GOPPAR in Paris in 2016, as a result of terrorist attacks, heavy flooding and strikes, hotels in the French capital are getting back on track, with the growth in June contributing to an 8.7% increase in profit per room for year-to-date 2017, to โฌ60.65.
Profit & Loss Key Performance Indicators โ Paris (in EUR)
June 2017 v June 2016
RevPAR: +6.3% to โฌ337.85
TrevPAR: +4.2% to โฌ484.25
Payroll: – 0.9 pts to 37.9%
GOPPAR: +8.1% to โฌ161.75
Whilst hotels in Paris have clearly been forced to operate more efficiently as a result of the tough period of operation in 2016 and have effectively cut costs in a number of key departments, the highest payroll levels in Europe continue to challenge profit performance at hotels in the French capital, which were recorded at just 17.1% of total revenue for year-to-date 2017.
WHAT TO TAKE AWAY FROM THIS ARTICLE:
- Whilst hotels in Paris have clearly been forced to operate more efficiently as a result of the tough period of operation in 2016 and have effectively cut costs in a number of key departments, the highest payroll levels in Europe continue to challenge profit performance at hotels in the French capital, which were recorded at just 17.
- โWhilst a lack of supply and burgeoning demand levels has enabled hotels in Budapest to drive a 46% increase in RevPAR over the last 36 months, it is noteworthy that astute hoteliers have leveraged this into a 60% increase in GOPPAR during the same period,โ added Pablo.
- Whilst Budapest has experienced a significant uplift in leisure tourists to the city, this month growth was fuelled by business visitors, as the Hungarian capital continues to establish its profile as a destination for MICE.