Like the three that preceded it, the final quarter of 2019 started with a year-over-year fall in profits per available room in the UK, according to data from HotStats.
The 5.3% YOY drop in GOPPAR in October was only surpassed by the 9.4% plunge recorded by hotels in April, and marks the seventh month in the year to record a YOY contraction in profits.
A small 0.1% YOY uptick in hotels average room rate was not enough to offset the effects of declining occupancy, which dropped by 2.2 percentage points YOY. As a result, RevPAR fell by 2.3% compared to the same month last year—the biggest cutback for this metric in 2019.
Led by a decrease in F&B revenue per available room (down 0.7% YOY), non-rooms revenue also took a hit in October, recording a 1.0% YOY fall. With declines across all major revenue centres, total revenue per available room dropped by 1.9% YOY.
The inability of UK hoteliers to control costs intensified the negative effects of a shrinking top-line. Labour costs increased by 2.2% YOY on a per-available-room basis, while ovearheads grew by 0.2%. This contributed to widening the profit gap between 2019 and 2018, with YTD 2019 profit per available room lagging 0.8% behind YTD 2018.
Profit conversion in the UK was recorded at 39.8% of total revenue.
Profit & Loss Performance Indicators – Total UK (in GBP)
| KPI | October 2019 v. October 2018 |
| RevPAR | -2.3% to ₤101.91 |
| TRevPAR | -1.9% to ₤155.71 |
| Payroll | +2.2% to ₤41.97 |
| GOPPAR | -5.3% to ₤61.93 |
Cardiff is a happy exception to the overall negative results in the UK, and the 9.0% YOY increase in GOPPAR achieved in October marks the third consecutive month of profit growth in the city.
This profitability boost was driven by a strong top-line. Fueled by YOY growth in occupancy (up 1.5 percentage points) and average rate (up 5.0%), RevPAR achieved a 5.0% increase compared to the same month of last year. F&B revenue per available room also exhibited a positive trend, climbing by 2.0% YOY. This resulted in a 3.1% YOY growth in total revenue per available room.
Even with increasing occupancy, hotels in Cardiff managed to control labour costs, which recorded no change compared to October of 2018 on a per-available-room basis. Overhead costs increased slightly year-over-year, by 0.4%. Despite these favourable results, YTD 2019 GOPPAR in Cardiff is still 0.5% below the YTD 2018 results.
Profit conversion in Cardiff was recorded at 31.1% of total revenue.
Profit & Loss Performance Indicators – Cardiff (in GBP)
| KPI | October 2019 v. October 2018 |
| RevPAR | +5.0% to ₤68.95 |
| TRevPAR | +3.1% to ₤103.65 |
| Payroll | 0.0% to ₤30.41 |
| GOPPAR | +9.0% to ₤32.20 |
With a 6.3% YOY decline in GOPPAR, October broke the seven-month streak of profit per available room growth in Edinburgh. Still, the positive results achieved in the previous months place the city’s YTD 2019 GOPPAR 4.2% above the same period of last year.
RevPAR suffered a 2.2% drop compared to October 2018, pulled by a 0.2 YOY percentage point fall in occupancy and a 1.9% YOY decrease in average rate. Conversely, F&B revenue per available room grew by 8.0% on a YOY basis, driving total revenue per available room up by 0.4% YOY.
This uptick in total revenue was not strong enough to counter the growth in expenses. The 4.3% YOY soar of labour costs per available room and the 3.2% YOY increase in overheads ended up eroding profitability for hoteliers in the city.
Profit conversion in Edinburgh was recorded at 36.5% of total revenue.
Profit & Loss Performance Indicators – Edinburgh (in GBP)
| KPI | October 2019 v. October 2018 |
| RevPAR | -2.2% to ₤106.35 |
| TRevPAR | +0.4% to ₤151.88 |
| Payroll | +4.3% to ₤42.01 |
| GOPPAR | -6.3% to ₤55.50 |
