May 2016 hotel profit jumps in South West and Leeds but drops in Glasgow

In its most recent UK Chain Hotels Market Review of May 2016, released this week, HotStats highlighted the South West, Leeds, and Glasgow.

In the South West, it reported a 2.6 per cent year-on-year increase in profit per room for the month, and a 3.4 per cent year-to-date uplift. In the past 36 months, profit per room had grown by 36.9 per cent to £31.24; while total revenue was up 4.4 per cent in the 12 months to May 2016.

In Leeds, the picture was just as positive, with a 5.3 per cent increase in RevPAR (revenue per available room) for the month, pushed up by a 4.3 per cent increase achieved in average room rate – much higher than the average provincial UK, which was at 2.3 per cent. Profit per room was up 14 per cent to £32.38.

The corporate sector in Leeds also did well, with a 15.6 per cent rate increase in the corporate over the last three years, to £71.92 in the 12 months to May 2016. A 5.6 per cent year-to-date increase in conference and banqueting spend also helped push up revenue.

In contrast, Glasgow has been affected by an increase in costs and a decline in profit per room; the latter saw a drop of 8.4 per cent in May, with RevPAR for the month down by 3.6 per cent year-on-year to £65.48.

This was also blamed on additions to supply in the form of 563 new bedrooms to the marketplace – of which 64 per cent were in the budget segment ‒ in 2015, thanks to “recent robust market conditions”, according to HotStats’ analysis.

Profit per room in Glasgow peaked at £42.32 in June 2015, and since then has fallen to £38.47 in the 12 months to May 2016. However, this is still higher than the low of £29.67 recorded in the 12 months to July 2013, which puts “Glasgow hotels in a positive profit position”, HotStats said.

HotStats creates regular reports on the state of the regional and London hotel industries, measuring a host of hotel chain portfolios by performance, revenue, cost, and profit.