Mixed performance for hotel chains during May


Mixed performance for hotel chains during May

Mixed performance for hotel chains during May

According to the latest report from HotStats, regional hotel chains across the UK registered mixed year-on-year profit growth during May, while hotels in the capital experienced an overall decline.

Hotels in the West Midlands performed particularly well, registering 4.7% growth in gross operating profit per available room (GOPPAR) despite overheads per available room increasing by 1%. In the area, average room rate (ARR) increased by 2.5% to £72.03 while occupancy grew by 1% to 69.5%; this resulted in an increase in revenue per available room (RevPAR) of 4% to £50.09.

However, the report revealed that travel agency commission per available room among West Midlands hotels rose by 19.2% to £5.03, meaning that £0.81 (41.5%) of the £1.95 gain in RevPAR was paid to third party intermediaries.

Chain hotels in Brighton registered a drop in GOPPAR of 6.4% to £46.05 and this was namely driven by a decrease in earnings from food (-5.8%), beverage (-2.3%) and meeting room hire (-26.2%). A 0.9% increase in payroll costs and 12.8% increase in overheads per available room contributed further to the drop in GOPPAR and as a result, hotels registered a mere 0.9% increase in total revenue per available room (TRevPAR) to £123.11 during May.

But, it wasn't all doom and gloom for chain hotels in Brighton: hoteliers did register a 3.7% increase in demand, and a 1.5% increase in ARR resulted in RevPAR growth of 6.5% year-on-year.

In Nottingham, hotels registered 2.8% and 2.6% growth in RevPAR and TRevPAR, respectively. However, this had no impact on hoteliers' bottom-line performance, as GOPARR remained stable at £23. ARR among hotels in the area rose by 4.4% while occupancy decreased by 1%, leading to RevPAR jumping to £43.25.

Performance was mixed in hotel ancillary departments during May, contributing to a growth in TRevPAR of 2.6% to £77.89. Payroll costs increased by 1%; this, along with 2.2% growth in overheads per available room, impacted growth profit and resulted in GOPARR stagnating during May.

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