Bristol hotels outpacing profit growth across regional UK

Hotels in Bristol recorded a 19.8% increase in profit per room this month, more than double the growth in the provincial UK, according to the latest data from HotStats.

While hotels polled in both Bristol and the regional UK recorded an 8.2% increase in revpar (revenue per available room) for the month, at £90.07, the achieved rate at hotels in the city was more 5.1% above the regional performance (£85.70).

Robust increases in top line performance were helped by year-on-year growth across most market segments and bolstered by a range of events, including the third largest 10k race in the UK with 13,000 participants, the ‘Love Saves the Day' festival and VegFest, which all contributed to the 2.7% increase in room occupancy and the 4.5% year-on-year increase in achieved average room rate.

However, it was via cost cutting measures that Bristol hoteliers showed themselves to be most shrewd, illustrated by their ability to convert a 7.7% increase in trevpar (total revenue per available room) to a 19.8% increase in profit per room. This is compared to the 8.5% increase in profit per room at the overall provincial UK market, on the back of a 5.9% increase in trevpar.

The cost cutting was further exemplified by the 2.3% year-on-year drop in payroll this month, which fell to 29% of total revenue and helped to drive a 35.3% profit conversion.

Despite recording a 6.5% year-on-year increase in room occupancy this month, hotels in Aberdeen still suffered a 2.8% decline in profit per room.

While the significant increase in room occupancy this month to 72% was almost entirely wiped out by an 8.7% decline in achieved average room rate, to £61.85, Aberdeen hoteliers clung on to achieve a 0.4% increase in revpar to £44.55.

Due, in part, to the uplift in volume, trevpar at hotels in Aberdeen increased by 1.7% year-on-year to £71.06, helped by a 4.5% increase in food and beverage revenue per available room, to £20.80.

However, the positive trevpar belies the continuing challenges to profitability, beginning in rooms, where rooms cost of sales increased by 14.8% year-on-year, to £3.87 per available room, equivalent to 8.9% of rooms revenue. In addition, with a 3.7% increase in rooms payroll and a 10.3% increase in rooms expenses, it is unsurprising that rooms department profit dropped by 3% year-on-year to £29.26.

Overall, profit per room at Aberdeen hotels fell to £17.57 this month, which was in spite of a 0.4% saving in total payroll to 33%.

Profit per room at hotels in the north east declined by 4.8% this month due to increases in key costs, including payroll (+2.6%) and overheads (+2.8%) on a per available room basis.

The decline was in spite of a 1.1% increase in revpar as hotels in the region benefited from a 2.2% increase in occupancy, which offset the 1.7% average room rate decline, to £73.52.

The decline this month is in contrast to the reasonably strong start to the year for hotels in the north east, illustrated by the 3.7% year-to-date increase in revpar, which contributed to the 2.6% year-to-date increase in profit per room.

However, HotStats data suggests that the achieved average room rate at hotels in the north east is under pressure, with declines this month recorded across key segments, including best available rate (-6.3%), corporate (-0.9%) and leisure (-3.8%).

UK hotel revpar continues to increase, with development outstripping acquisition >>

London hotels break revpar figures for May >>

Bristol Hoteliers Association relaunches with 30 members >>

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