According to the latest HotStats survey of 624 full-service UK hotels, the sudden growth in the capital is mainly rate-driven with hoteliers pushing average room rates up by 8.9 per cent to £158.17, compared with £145.22 a year earlier.
And it’s paid dividends, with a 6.4 per cent increase in total revenues per available room (TrevPAR) and an 8.2 per cent surge in Gross Operating Profit (GOPPAR). Moreover, it only resulted in a slight occupancy decrease, of 0.6 per cent to 88 per cent, leading to a RevPAR increase of 8.2 per cent for the month, up to £139.15.
Besides the rooms department contribution, additional revenue per available room derived from food (up 3.7 per cent) at £23.49 and meeting room hire (up 1 per cent) at £8.49 helped to deliver a 6.4 per cent increase in TrevPAR, at £188.87 against £177.49 in September 2012.
Departmental profit conversion per available room (DOPPAR) improved by 7.7 per cent to 69.2 per cent of total revenue, thanks to cost control and, combined with a 1.5 percentage points reduction in payroll, GOPPAR in September 2013 rose by 8.2 per cent to £96.54.
However, when looking at the third quarter performance as a whole, occupancy is the only key performance indicator showing a positive movement with a 3-per-cent increase to 87.1 per cent, compared to 84.1 per cent in Q3 in 2012. Assessing the RevPAR, TrevPAR and GOPPAR perspective, results showed a decrease by 4.9 per cent, 8 per cent and 11.5 per cent respectively compared to the same period last year - largely due to the Olympics effect.
Provincial positivity
Meanwhile, Provincial hoteliers welcomed a fourth consecutive month of increases in all key measures, with total revenues per available room (TrevPAR) and Gross Operating Profit per available room (GOPPAR) growth in September by 2.4 per cent and 2.7 per cent respectively.
A RevPAR growth of 4.8 per cent was facilitated by a combination of rising average room rate (3.8 per cent) and an increase in occupancy of 0.7 per cent. Leisure is the only other department with a positive increase of 2.3 per cent at £5.28 per available room and other notable revenue sources remained flat (food) or slightly decreased (beverage and meeting room hire), leading to a growth in TrevPAR to £107.12.
Continued cost control contributed to further improvements in profitability, by 2.7 per cent to £36.37 per available room.
When looking at the third quarter performance, the RevPAR, TrevPAR and GOPPAR results showed a surge by 5.7 per cent, 3.7 per cent and 5.5 per cent respectively compared to Q3 in 2012 despite a 2.5 per cent escalation in overheads per available room.
In September 2013, York hoteliers achieved occupancy of 91.7 per cent (up by 1.2 per cent year-on-year) and, added to a 1.4 per cent increase in ARR, grew RevPAR by 2.7 per cent to £64.64. Room revenue accounted for 63.6 per cent of total revenue; other revenues per available room that saw an increase included meeting room hire, being the highest (10.6 per cent), leisure (3.5 per cent) and food (1.7 per cent), leading to a TrevPAR rise of 1.7 per cent to £101.61.
Despite a payroll decrease of 0.5 per cent, hotels in York saw their profitability impacted with a surge in operating expenses. Rooms (up 0.3 per cent), food (3.7 per cent) and leisure (8 per cent) and overheads significantly increased by 7.4 per cent. As a result, GOPPAR performance was down by 3.9 per cent to £31.99.