Record revpar fuels profit growth at UK hotels

29 August 2017 by
Record revpar fuels profit growth at UK hotels

Record revpar levels helped hotels in the UK maintain top- and bottom-line growth in 2017, according to the latest poll of full-service chain hotels from HotStats.

The 4.4% year-on-year increase for July fuelled a 3.8% increase in gross operating profit per available room (goppar). Revenue per available room (revpar), which hit £105.28 and exceeded the previous high of £103.78 in September 2016, was helped by a 0.2% increase in room occupancy to 85.3%, also a record for UK hotels.

Despite this, the margin of growth in total revenue per available room (trevpar) was limited to 3% and hampered by falling non-rooms revenues, including food and beverage (-1.4%) and conference and banqueting (-4%) on a per available room basis.

Cost savings helped to offset the decline in non-rooms revenue, which included a 0.1% reduction in payroll, to 25.3% of total revenue. As a result, hotels in the UK recorded their highest goppar of the year so far, at £66.12, equivalent to a profit conversion of 43.2% of total revenue.

Pablo Alonso, chief executive of HotStats, said: "Despite recent reports that more than 7,500 hotel rooms have opened in the UK since the beginning of 2017, the highest number of additions since 2012, market performance is going from strength to strength, led by room occupancy levels which are giddily high."

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