Hotel Profit in Cardiff Surges by 116.5% as Rugby World Cup Fills City
Despite the exit of their home nation in the quarter finals of the tournament, hoteliers in the Welsh capital were wearing broad smiles in October as they recorded a 116.5% year-on-year increase in Gross Operating Profit per Room (GOPPAR) for the month as the city swelled with Rugby World Cup fans, according to the latest data from HotStats.
Cardiff is renowned for its ability to effectively host major events, with the Six Nations and fixtures from the Autumn International Series typically creating spikes in annual performance. However, all expectations were exceeded this month as the city hosted five games, including two high-profile quarter final matches and the electric atmosphere spilled out of the Millennium Stadium on to the streets of Cardiff with street theatre, music and the Rugby World Cup Fan Zone, visited by more than 150,000 people during the tournament.
The benefit of the influx in demand was not only reflected in the 68.2% increase in RevPAR (Revenue per Available Room), to £101.74, but TrevPAR (Total Revenue per Available Room) at hotels in the Welsh capital soared by +45.1% to £163.48. Departmental growth was achieved in total food revenue (+14.2%) and, in keeping with the stereotype of the rugby fan, beverage revenue, which increased by +32.4% year-on-year.
Demand from the corporate segment wisely avoided the Welsh capital in October, resulting in a year-on-year reduction in demand for this sector, but this was more than adequately replaced in terms of volume and price by Rugby World Cup-related business. In addition to the 4.1 percentage point increase in room occupancy, the 60.3% increase in achieved average room rate at hotels in Cardiff was as a result of rate increases in the Best Available Rate (+42.4%), Leisure (+83.9%) and Groups (+162.7%) sectors. An 88.9% increase was also recorded in the rate achieved in the conference segment as the city hosted numerous corporate hospitality packages associated with the tournament.
Rugby World Cup Fuels Strongest Month of Profit Growth for London Hotels in 2015
Venues in London hosted a total of 17 games of the 2015 Rugby World Cup, fuelling the greatest monthly year-on-year increase in RevPAR (+8.3%) and GOPPAR (+10.9%) at hotels in the capital in 2015. Whilst the lion’s share of London’s games were at Twickenham, there were also regular fixtures at Wembley Stadium and the Olympic Stadium throughout the tournament, spreading the demand for accommodation throughout the city.
The growth in October continues the period of strong operation in Q3 2015, during which London hoteliers achieved a 5.2% increase in RevPAR and 6.7% increase in GOPPAR. This was a welcome upturn following the challenges in H1 2015, in which a 2.5% decline in profit was recorded for the period.
As a result of the consecutive months of growth, as well as the significant uplift in October, year-to-date performance for London hotels is now back in positive territory, at +1.7% in RevPAR and +2.2% in GOPPAR.
South East Hoteliers Join Many Regions to Have Bumper Month of Profit Growth
Not only did the strong performance in London permeate out to a range of peripheral hotel markets in the South East, the ambition of the Rugby World Cup to reach all corners of the country meant that fixtures were hosted in other locations in the region including Brighton and Milton Keynes. As a result, a 10.3% increase in GOPPAR was recorded at hotels in the South East to £40.95, from £37.14 during the same month in 2014.
Strong year-on-year growth in profit for the month of October was also recorded in other regions which played host to Rugby World Cup fixtures and the projected 466,000 additional visitors to the UK, including the West Midlands (+6.3%), East Midlands (+9.6%), South West (+12.2%) and North East (+28.5%).
The performance of hotels in the South East region in October continues to support a very strong year of results for 2015, illustrated by the year-to-date profit increase of 7.8%. This is well above the 4.2% growth in TrevPAR recorded by hotels in the region and is as a result of a reduction in labour costs and direct expenses in the key hotel departments of rooms and food and beverage.
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