UK hotels' revenue flat for October due to "increasing costs"

UK hotels saw a marginal rise in revenue last month despite "increasing costs" which contributed to a decline in profit conversion.

A worldwide poll of full-service hotels from HotStats released today revealed a 1.1% increase in gross operating profit per available room (goppar), and a 2.1% increase in revenue per available room (revpar) in October, which the hotel benchmark service reports is due to a 2.4% increase in average room rate to £116.11 despite a 0.3% decline in room occupancy during the month.

The marginal levels of growth in October, HotStats states, have been "outpaced by increasing costs" leading to a decline in profit conversion across several departments including food and beverage, which is down 1.2% because of increases in cost of sales in food (1.2%) and beverage (0.8%) as well as payroll (4.3%) on a per available room basis.

On the other end of the scale, Leeds was the worst performing county with a 0.8% increase in revpar. HotStats credits this to a 2% increase in achieved average room rate, to £81.16, which resulted in a decline in room occupancy to 82%.

Pablo Alonso, chief executive of HotStats, said: “According to the Bank of England, official data showed consumer prices increased by 3% in the year to October 2017, the highest level in five years, led by growth in food prices and fuel costs.

“While 2017 is shaping up to be another positive year of revenue and profit performance for hotels in the UK, owners and operators will do well to monitor any further increases in food prices, and indeed other costs, which could challenge profitability levels in 2018.”

HotStats gives a monthly comparison of hotels’ performance covering 70 hotel performance, revenue, cost and profit statistics providing the deepest insight available into hotel operations.

London hotels break revpar figures for May >>

Weekly hotel revpar soars nearly 17% in London >>

UK hotel performance to slow down in 2018 >>

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