Growth in profit per room at hotels in the West Midlands has been fuelled by record top line performance as the region continues to grow occupancy beyond previous levels, even during historic low periods, according to the latest data from HotStats.
However, the ability of West Midlands hoteliers to drive occupancy beyond the previous high of 71.9 percent in February 2015 has been at the expense of a 10.4 percent increase in Rooms Costs of Sales (ie HotStats measure of Travel Agent’s Commissions, Reservation Fees, GDS Fees, Third Party Fees and Internet Booking Fees) to £6.03, or 10.5 percent of Rooms revenue.
TravelWireNews Chatroom for Readers (join us)
Additionally, a 5.1 percent increase in Rooms Payroll per available room resulted in Rooms profit conversion at hotels in the West Midlands falling by 0.6 percentage points to 67.7 percent of Rooms revenue, which was in spite of a 3.9 percent increase in RevPAR (Revenue per Available Room) for the month.
That said, the increase in Rooms Revenue at West Midlands hotels this month was supplemented by growth in non-rooms revenue, including Food and Beverage (+2.8 percent), Conference and Banqueting (+4.8 per cent) and Leisure (+5.3 percent), which contributed to the 3.3 percent increase in TrevPAR (Total Revenue per Available Room) and a 4.8 percent year-on-year increase in gross operating profit per room.
Glasgow Hotels Bouncing Back Towards Commonwealth Profit Performance
Following two years of profit decline in 2015 (-6.2 percent) and 2016 (-1.3 percent), hotels in Glasgow have recorded two consecutive months of strong profit growth in 2017 and are bouncing back towards the premium performance achieved in 2014 when the city hosted the Commonwealth Games.
The hotel market in Glasgow has struggled to absorb the 880 bedrooms of supply which have entered the market since 2014. And with 73 percent of additions operating in the budget segment, there has been significant downward pressure on rate, illustrated by the achieved average room rate in the 12 months to February 2017, which at £81.20, remains behind the rate recorded in 2014, at £81.25.
However, the 7.7 percent increase in RevPAR in February is further to a 6.9 percent uplift in January 2017, which has been led by growth in both price and volume.
Despite an increase in both Payroll (+4.7 percent) and Overheads (+3.8 percent), a 6.2 percent increase in profit per room was recorded at Glasgow hotels for year-to-date 2017, to £20.83.
Profit Drops at Heathrow Hotels Despite Record Airport Passenger Numbers
Despite Heathrow Airport recording its best ever February, with a 5.5 percent increase in passenger numbers, profit per room at nearby hotels fell by 4.3 percent as a result of falling RevPAR and rising costs.
Heathrow Airport accommodated a record 5.27 million passengers in February. However, a 2.0 percentage point increase in achieved average room rate was not sufficient to offset a 1.7 percentage point decline in room occupancy, and RevPAR at hotels at Heathrow Airport fell by 0.2 percent to £57.21.
Whilst hotels at Heathrow achieved rate growth in both the individual leisure (+3.1 percent) and group leisure (+10.0 percent) sectors, volume dropped in both of these key segments.
In spite of the 0.2 percent decline in Rooms Revenue, as well as a 2.6 percent drop in Conference and Banqueting Revenue, hotels at Heathrow were able to record a 0.3 percent increase in total revenue this month, which was primarily thanks to the 2.1 percent year-on-year increase in Food and Beverage Revenue.
However, this revenue increase was wiped out by a 5.5 percent year-on-year increase in payroll. As a result, profit levels at hotels at Heathrow Airport fell by 4.3 percent this month, to £25.57 per available room, equivalent to 30.1 percent of total revenue.
Original eTN articles are editorially regulated according to news values, significance, and accuracy, copyright protected, and independent of any advertising and sponsorship carried unless clearly marked otherwise.