London hotels ahead of European rivals for profitability

12 May 2006
London hotels ahead of European rivals for profitability

Low labour costs and strong occupancy figures enabled London hotels to top the table of the most profitable ten cities in Europe in the three months to March, according to a new report.

The HotStats survey of European chain hotels, carried out by Tri Hospitality Consulting, found London hotels had an income before fixed costs per available room (IBFCpar) of €80.99 (£55.57).

This figure was 60% higher than nearest rival Paris (with an IBFCpar of €50.99 or £34.98).

It was three times ahead of the least profitable city, Budapest, which had an IBFCpar of €22.27 or £15.28.

Although London recorded the highest revpar during the quarter of €130.18 (£89.30), this was just €8.81 (£6) above the €121.37 (£83.27) achieved in Paris

However, London hotels spent just 27.9% of their turnover on wages compared with 42.9% in Parisian hotels, which spent the third highest percentage of sales on salaries after Vienna and Brussels.

TRI monthly European figures >>

By Angela Frewin

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