Date: January 2018
Place: Europe with specific reference to Germany
HotStats, the leading hospitality intelligence company, based in the UK, with a global coverage, provides a unique profit and loss benchmarking service to hoteliers from the UK, Europe and the Middle East, which enables monthly comparison of hotels’ performance against their competitors.
It is distinguished by the fact that it provides in excess of 100 performance metric comparisons covering 70 areas of hotel revenue, cost, profit and statistics providing far deeper insight into the hotel operation than any other tool. The HotStats database currently totals 800,000 rooms worldwide.
In addition to a 0.7 percentage point increase in room occupancy in November, hotels in Europe benefited from a 4.4% increase in achieved average room rate, to €146.12, which contributed to a 5.6% year-on-year increase in RevPAR, to €101.43.
The growth in Rooms Revenue was supported by increases in Non-Rooms Revenues, including Food & Beverage (+3.9%), Conference & Banqueting (+4.9%) and Leisure (+1.0%), on a per available room basis, which contributed to the 4.8% increase in TrevPAR, to €164.41.
The steady top line growth at hotels in Europe remains led by a balanced base of demand, illustrated by the year-on-year increase in achieved rate in the Residential Conference (+7.2%), Corporate (+7.0%) and Individual Leisure
Profit & Loss Key Performance Indicators – Europe (in EUR)
November 2017 v November 2016
RevPAR: +5.6% to €101.43
TrevPAR: +4.8% to €164.41
Payroll: -0.4 pts to 35.8%
GOPPAR: +9.6% to €50.26
In contrast to the positive performance across Europe, hotels in key German cities struggled to grow profit in November as buoyant conditions in the largest economy in the region fuelled an increase in costs.
In Frankfurt, hotels had a positive month of top line performance in November, recording a 7.9% increase in RevPAR, which was due to year-on-year growth in both room occupancy (+0.4-percentage points), to 79.0%, and achieved average room rate (+7.3%), to €151.83.
But despite increases in some Non-Rooms Revenue departments, which included an increase in Food & Beverage (+4.3%) and Conference & Banqueting (+3.2%), TrevPAR growth was slight at just 0.7%.
Profit & Loss Key Performance Indicators – Frankfurt (in EUR)
November 2017 v November 2016
RevPAR: +7.9% to €119.97
TrevPAR: +0.7% to €182.20
Payroll: +1.6 pts to 29.0%
GOPPAR: -6.0% to €71.77
Significant year-on-year increases were also recorded in Cost of Sales in Rooms (+18.2%), Food (+10.3%) and Beverage (+11.3%), as well as Overheads (+4.8%), on a per available room basis.
As a result of spiralling costs, GOPPAR at hotels in Frankfurt in November fell by 6.0% to €71.77. This was equivalent to a 2.8-percentage point decline in profit conversion, but remains punchy at 39.4% of total revenue.
Despite the challenges to costs, 2017 has been a good year for hotels in Frankfurt, supported by several months of exceptional growth as a result of events hosted in the city, including the IAA Motor Show, which attracted approximately 810,000 visitors across eleven days in September.
As a result, and in spite of the decline this month, in the 11 months to November 2017 hotels in Frankfurt have recorded a 5.8% increase in GOPPAR, to €58.80, equivalent to a profit conversion of 36.3% of total revenue.
“Frankfurt remains a robust hotel market, underpinned by corporate travel and a strong MICE market and has been further buoyed by the expansion of the Messegelände in 2016. Furthermore, top line performance at hotels in Frankfurt has remained strong, in site of significant additions to stock in the last 18 months.
However, payroll costs are on the rise as the jobless rate in Germany is at a record low and a 4% increase in minimum wage was implemented in January 2017. Additionally, inflation rates in Germany are at their highest level since 2013, which is driving up Cost of Sales,” said Pablo Alonso, CEO of HotStats.
For hotels in Berlin, in spite of achieving a record high in overnight stays in 2016, significant additions to hotel stock are diluting demand levels, which is impacting revenue and profit levels at properties in the German capital.
November represented one of the most significant year-on-year declines in room occupancy in 2017 at hotels polled, dropping by 6.2 percentage points, to 75.8%. In addition, hotels in Berlin recorded a 1.7% drop in
achieved average room rate, to €141.03, which contributed to the 9.1% drop in RevPAR, to €106.91.
With such a significant drop in volume, a decline in other revenue departments was inevitable, and as a result, TrevPAR at hotels in Berlin fell by 10.5% in November, to €180.09.
Profit & Loss Key Performance Indicators – Berlin (in EUR)
November 2017 v November 2016
RevPAR: -9.1% to €106.91
TrevPAR: -10.5% to €180.09
Payroll: – 3.9 pts to 31.7%
GOPPAR: -21.3% to €55.52
In addition to declining revenue levels, profit levels were further depleted by increasing costs, which were led by a 3.9-percentage point increase in Payroll, to 31.7% of total revenue.
As a result, GOPPAR at hotels in Berlin fell by 21.3% in November to €55.52. This is equivalent to a profit conversion of 30.8%, and 4.2 percentage points below the same period in 2016, at 39.2%.
Occupancy (%) – Is that proportion of the bedrooms available during the period which are occupied during the period.
Average Room Rate (ARR) – Is the total bedroom revenue for the period divided by the total bedrooms occupied during the period.
Room Revpar (RevPAR) – Is the total bedroom revenue for the period divided by the total available rooms during the period.
Total Revpar (TRevPAR) – Is the combined total of all revenues divided by the total available rooms during the period.
Payroll % – Is the payroll for all hotels in the sample as a percentage of total revenue.
GOP PAR – Is the Total Gross Operating Profit for the period divided by the total available rooms during the period.
THPT Comment: Interesting that the industry is finally getting to look at GOPPAR – Gross Operating Profit and not just RevPAR – Revenue per available room