West Midlands Hoteliers Make a Bright Start to 2016
Hotels in the West Midlands made a good start to 2016, recording a 1.5% increase in profit per room driven by revenue growth across all departments, including Rooms (+3.0%), Food & Beverage (+0.4%), Conference & Banqueting (+2.9%) and Leisure (+7.3%), according to the latest HotStats data.
The overall 1.8% increase in TrevPAR (Total Revenue per Available Room) was sufficient to offset increasing costs in both payroll (+3.0%) and overheads (+2.7%) on a per available room basis.
That said, despite the 1.5% year-on-year increase in GOPPAR (Gross Operating Profit per Available Room), profit conversion for West Midlands hotels fell slightly, by 0.1 percentage points, to 22.3% of total revenue for the month.
Performance Drops For Heathrow Hoteliers Despite Record Passenger Numbers
Hoteliers at Heathrow Airport suffered a 2.3% decline in RevPAR (Revenue per Available Room) this month, as a result of a 1.1 percentage point drop in occupancy and a 0.8% decrease in achieved average room rate. The decline in January was in contrast to the strong performance by Heathrow hoteliers in 2015, during which a 5.5% increase in RevPAR was recorded, which enabled GOPPAR growth of 8.7% for the year, to £34.10. But was also contrary to the 1.0% increase in passenger numbers handled by Heathrow Airport, to 5.5 million, a record for the month of January.
The best ever start to a year for Heathrow Airport was on the back of a record year in 2015, as 75 million passengers passed through the UK’s largest airport. The growth in January was attributed to improved travel to/from emerging markets, including Mexico (+21%) and China (+16%), as well as the introduction of new routes and new aircrafts.
Top line performance levels at Heathrow hotels are typically lowest in January, which leaves little margin for cost increases. Despite the best efforts of Heathrow hoteliers to reduce costs, recording a 6.7% saving in payroll and a 4.3% reduction in overheads on a per available room basis, the savings were not sufficient to offset the 4.2% decline in TrevPAR. And as a result, GOPPAR at Heathrow hotels dropped by 4.0% to £21.41 per available room for the month.
Nottingham Hotels Continue to Grow Profit into 2016
Further to the 8.5% increase in RevPAR and 7.8% growth in GOPPAR in 2015, hotels in Nottingham have continued to grow revenue and profit into January 2016, recording year-on-year growth in both key metrics.
Despite suffering a 0.3% decline in achieved average room rate, a 1.3% increase in RevPAR for the month of January was recorded due to a 0.9 percentage point uplift in room occupancy, to 59.8%. There have been no new additions of note to Nottingham hotel supply since the opening of the 202-bedroom De Vere Orchard Hotel in 2012, and the recovery in the economic profile of the city has enabled hoteliers to thrive, recording a 24.5 per cent increase in RevPAR to £44.66 in the 12 months to January 2016, from £35.86 in the 12 months to January 2013.
Nottingham hoteliers suffered through the economic downturn, but performance in the East Midlands city goes from strength to strength, which in 2015, was driven somewhat surprisingly by growth in demand from the leisure segment, enabling an increase in the achieved rate in the individual leisure (+7.3%) and group/tours (+13.2%) segments.
The strong top line performance has successfully flowed through to the bottom line, with hotels in Nottingham recording a GOPPAR of £24.00 in the 12 months to January 2016, compared to £17.67 in the 12 months to January 2013, a 35.8% uplift.
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