HotStats European Chain Hotels Market Review – May 2015

Madrid and Prague hotels recorded increases in gross operating profit per available room (GOPPAR) of 12.8% and 28.8% respectively in May, according to the latest data from HotStats.

May was another positive month in Madrid with demand shooting up by 7.7 percentage points and average room rate (ARR) climbing by 1.9%; revenue per available room (RevPAR) grew by 12.0% to €118.49. Surges in other revenues per available room such as meeting room hire (+5.8%) and beverage (+0.8%) also contributed to the total revenue per available room (TRevPAR) rise of 7.9%. A 1.0 percentage point decrease in payroll resulted in departmental operating profit per available room (DOPPAR) surging by 9.9% compared to the same period last year. Overheads per available room hiked by 4.3% to €31.96, but that was not enough to temper the GOPPAR growth of 12.8% to €67.37, representing a gross operating profit conversion of 39.9% for the month.

The Czech capital also forged ahead in May recording a 25.3% uplift in RevPAR thanks to a 5.3 percentage point increase in occupancy combined with a 17.6% growth in ARR. A closer look at the segmentation for the month demonstrates that most segment rates climbed, with B.A.R rate taking the lead (accounting for 9.2% of the business mix) and rising by 23.0%. Similar performances were registered in non-rooms departments and TRevPAR went up by 18.9% to €139.12. Astute operating cost control and a decrease in payroll (-2.1 percentage points) resulted in DOPPAR surging by 23.3% to €97.07 and GOPPAR by 28.8% to €71.06.

Challenging month for Berlin and Munich

Berlin registered negative year-on-year comparisons across all key performance indicators for the month of May. Both occupancy and ARR declined by 3.7 percentage points and 1.5% respectively to deliver a RevPAR drop of 5.7%. Similar movements in non-rooms revenues did not help the poor performance and TRevPAR decreased by 11.8%. With payroll going up by a noteworthy 3.7 percentage points, DOPPAR fell by 16.7% to €94.16. Overheads per available room also climbed by 1.7% mostly due to sales and marketing expenses increasing by 19.5%, thereby contributing to a GOPPAR decline of 25.6% to €56.74.

Different city but same story for Munich in May; hoteliers also suffered from a combined decrease in occupancy (-0.6 percentage points) and ARR (-0.3%), resulting in a RevPAR drop of 1.0%. Mixed movements in non-rooms departments delivered the TRevPAR decline of 1.2%. With payroll rising by 2.8 percentage points, DOPPAR dropped by 5.6% to €97.65, and GOPPAR fell by 10.1% to €62.37. When looking at the profit conversion rate, hoteliers still managed to close the month with 38.1%, which represents a 3.8 percentage point decrease compared to May 2014.

RevPAR flatters to deceive in Budapest

In May, Budapest hoteliers boosted ARR by 8.7% thus occupancy went down marginally, which resulted in a RevPAR uplift of 8.5% to €96.08. However, decreases in non-rooms revenue per available room from meeting room hire (-50.0%), beverage (-10.5%) and food (-8.8%) softened the TRevPAR rise of 1.6% to €132.92. Nevertheless, a 2.0 percentage point increase in payroll combined with a 6.5% surge in overheads per available room diluted the top-line gains from the rooms department, and GOPPAR dropped 0.5% to €58.12 during the month.

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.

Original article can be read at: Hospitality Net