London hotels lose out to regions in June

23-Jul-2014 - Last updated on 06-Aug-2024 at 15:45 GMT

Liverpool outpaced London in terms of hotel profit growth last month

London hotels lost out to the regions last month, with East Midlands and Liverpool hotels enjoying particular growth, according to the latest HotStats UK Chain Hotels Market Review.

Hotstats said that while profits in the capital fell for a second consecutive month in June, hotels in the UK provinces continued to show growth.

Occupancy in the East Midlands surged 1.1 percent and average room rates (ARR) rose 1.6 per cent, which pushed rooms revenue per available room (RevPAR) up 3.1 per cent to £45.92. This, combined with growth in non-rooms departments, helped drive gross operating profit per available room (GOPPAR) up 3 per cent despite increases in payroll and overheads.

Liverpool hotels also enjoyed occupancy growth of 4.3 per cent rise in occupancy, while ARR rose 4.4 per cent, helping drive a10.5 per cent uplift in RevPAR.

A small decline in payroll and efficient cost control meant that DOPPAR rose 8 per cent, which offset an increase in overheads per available room. As a result, Liverpool hotels recorded a 13.2 per cent increase in GOPPAR for the month of June.

Coventry profits plummet

Not all regional hotels enjoyed profit growth in June, with Coventry hotels suffering from falling TRevPAR and GOPPAR despite rising RevPAR.

According to Hotstats, Coventry hotels enjoyed occupancy growth of 2.5 per cent last month, while ARR rose 0.9 per cent and RevPAR increased 4.7 per cent.

However, falling non-rooms revenue from food and beverage sales and C&B room hire resulted in a 1.2 per cent drop in TRevPAR to £90.20. Coventry hotels also suffered from increases in payroll and overheads, with poor operating cost control contributing to a further hit on profits.

As a result, hotels in the city saw GOPPAR plummet by 18.5 per cent in June, although Hotstats pointed out that profits in Coventry are still up 10.3 per cent for the first six months of the year.

BDO figures

A report published by BDO LLP earlier this month stated that regional hotel occupancy increased 0.9 per cent in June, with warm weather and business travel helping boost demand across the UK.

BDO said that London hotels enjoyed ‘steady growth’ in room rates and occupancy last month, but it did not indicate hotel profits in the capital.