Despite RevPAR growth, an increase in costs continued to chip away at profit levels at hotels in the UK in May, according to the latest data from HotStats. Hotels in the region have now recorded a year-over-year drop in profit in every month of 2019, but it runs concurrently with overall increases in RevPAR, which has fallen only once since the beginning of the year.
This month, the 3.0% YOY decline in GOPPAR to £53.75 was on the back of a 0.3% increase in RevPAR to £93.84.
And whilst both RevPAR and GOPPAR were highs for the year so far, the two measures are becoming increasingly divergent, with flow-through figures consistently in negative territory.
On a positive note, revenue levels remain buoyant and YOY growth in ancillary revenues, including Food & Beverage (up 3.5 percent) and Conference & Banqueting (up 5.6 percent) revenue, contributed to a 1.0% increase in TRevPAR to £145.13.
However, revenue growth was canceled out by rising costs, led by a 4.5% YOY increase in payroll to £41.71, as well as a 2.3% increase in overheads to £31.29.
Despite the challenges to GOPPAR, profit conversion remained steady at 37.0% of total revenue.
Profit & Loss Key Performance Indicators – Total UK (in GBP)
| KPI | May 2019 v. May 2018 |
| RevPAR | +0.3% to £93.84 |
| TRevPAR | +1.0% to £145.13 |
| Payroll | +4.5% to £41.71 |
| GOPPAR | -3.0% to £53.75 |
In contrast to the performance of the total UK, it was a good month for hotels in Newcastle, which secured a 17.2% YOY increase in profit per room to £30.72, as the city hosted a number of events, including the Heineken Champions Cup and European Rugby Challenge Cup finals.
This was a high for 2019 and the strongest GOPPAR performance in the city since September 2018. It was also a welcome break for the city’s hoteliers who have experienced a relatively consistent decline in profit since the beginning of 2018 due, in part, to an increase in supply.
The increase in profit this month was led by a 10.2% uplift in RevPAR to £64.97 and came in spite of an 8.2% decline in ancillary revenues, which fell to £28.87.
This month was also the first time, since November 2017, that hotels in the city recorded a YOY reduction in payroll, which dropped by 7.2% to £24.68, on a per-available-room basis.
Profit & Loss Key Performance Indicators – Newcastle (in GBP)
| KPI | May 2019 v. May 2018 |
| RevPAR | +10.2% to £64.97 |
| TRevPAR | +3.8% to £93.84 |
| Payroll | -7.2% to £24.68 |
| GOPPAR | +17.2% to £30.72 |
Meanwhile, Aberdeen hotels had their struggles, reflected in the ongoing decline in YOY profit per room, which fell by 7.8% in the month to £17.00 and contributed to the 22.9% YOY decline for YTD 2019.
Whilst room occupancy levels still show signs of upward movement, achieved average room rate fell by 5.0% in the month to £57.52 and has now dropped by almost £25 in the last three years.
The 4.9% RevPAR decline this month was coupled with a 5.4% decrease in ancillary revenues, which contributed to the 5.1% YOY decline in TRevPAR to £61.80.
Profit & Loss Key Performance Indicators – Reading (in GBP)
| KPI | May 2019 v. May 2018 |
| RevPAR | -4.9% to £44.47 |
| TRevPAR | -5.1% to £61.80 |
| Payroll | +0.9% to £20.54 |
| GOPPAR | -7.8% to £17.00 |
Hotels in the region have now recorded a year-over-year drop in profit in every month of 2019, but it runs concurrently with overall increases in RevPAR, which has fallen only once since the beginning of the year.
This month, the 3.0% YOY decline in GOPPAR to £53.75 was on the back of a 0.3% increase in RevPAR to £93.84.
And whilst both RevPAR and GOPPAR were highs for the year so far, the two measures are becoming increasingly divergent, with flow-through figures consistently in negative territory.
On a positive note, revenue levels remain buoyant and YOY growth in ancillary revenues, including Food & Beverage (up 3.5 percent) and Conference & Banqueting (up 5.6 percent) revenue, contributed to a 1.0% increase in TRevPAR to £145.13.
However, revenue growth was canceled out by rising costs, led by a 4.5% YOY increase in payroll to £41.71, as well as a 2.3% increase in overheads to £31.29.
Despite the challenges to GOPPAR, profit conversion remained steady at 37.0% of total revenue.
Profit & Loss Key Performance Indicators – Total UK (in GBP)
| KPI | May 2019 v. May 2018 |
| RevPAR | +0.3% to £93.84 |
| TRevPAR | +1.0% to £145.13 |
| Payroll | +4.5% to £41.71 |
| GOPPAR | -3.0% to £53.75 |
In contrast to the performance of the total UK, it was a good month for hotels in Newcastle, which secured a 17.2% YOY increase in profit per room to £30.72, as the city hosted a number of events, including the Heineken Champions Cup and European Rugby Challenge Cup finals.
This was a high for 2019 and the strongest GOPPAR performance in the city since September 2018. It was also a welcome break for the city’s hoteliers who have experienced a relatively consistent decline in profit since the beginning of 2018 due, in part, to an increase in supply.
The increase in profit this month was led by a 10.2% uplift in RevPAR to £64.97 and came in spite of an 8.2% decline in ancillary revenues, which fell to £28.87.
This month was also the first time, since November 2017, that hotels in the city recorded a YOY reduction in payroll, which dropped by 7.2% to £24.68, on a per-available-room basis.
Profit & Loss Key Performance Indicators – Newcastle (in GBP)
| KPI | May 2019 v. May 2018 |
| RevPAR | +10.2% to £64.97 |
| TRevPAR | +3.8% to £93.84 |
| Payroll | -7.2% to £24.68 |
| GOPPAR | +17.2% to £30.72 |
Meanwhile, Aberdeen hotels had their struggles, reflected in the ongoing decline in YOY profit per room, which fell by 7.8% in the month to £17.00 and contributed to the 22.9% YOY decline for YTD 2019.
Whilst room occupancy levels still show signs of upward movement, achieved average room rate fell by 5.0% in the month to £57.52 and has now dropped by almost £25 in the last three years.
The 4.9% RevPAR decline this month was coupled with a 5.4% decrease in ancillary revenues, which contributed to the 5.1% YOY decline in TRevPAR to £61.80.
Profit & Loss Key Performance Indicators – Reading (in GBP)
| KPI | May 2019 v. May 2018 |
| RevPAR | -4.9% to £44.47 |
| TRevPAR | -5.1% to £61.80 |
| Payroll | +0.9% to £20.54 |
| GOPPAR | -7.8% to £17.00 |
