page contents

European chain hotels – Barcelona is booming, Brussels and Budapest struggle

European chain hotels – Barcelona is booming, Brussels and Budapest struggle

Hotels in Barcelona achieved a 12.4% year-on-year increase in profit per room in January, continuing the strong profit growth achieved in the Catalan capital in 2016, according to the latest data from HotStats.

Barcelona was one of the top performing hotel markets in Europe in 2016 recording a year-on-year profit increase of 9.6%, which was driven by a 6.7% increase in RevPAR (Revenue per Available Room) to €165.35, led by a 7.1% increase in achieved average room rate.

Whilst occupancy continued to slide in January, falling by 0.7 percentage points year-on-year, this was more than cancelled out by a 7.7% increase in achieved average room rate during the same period, to €164.70, fuelling a 6.3% increase in RevPAR for the month.
In addition to the increase in Rooms Revenue, hotels in Barcelona recorded growth in Non-Rooms Revenue departments, including Food and Beverage (+13.2%) and Conference and Banqueting (+20.8%) on a per available room basis.

As a result of rising revenues and falling costs, hotels in Barcelona have recorded a 9.4% increase in profit per room in the 12 months to January 2017, to €120.60 per available room, equivalent to a profit conversion of 45.2% of total revenue.

Brussels Fighting Back After Torrid 2016

Following the poor performance in 2016, as a result of terrorist attacks in the city, 2017 has started positively for hotels in Brussels recording a 4.4% increase profit per room for the month.
The attacks on Brussels in March 2016 were the deadliest act of terrorism in Belgium’s history. Unsurprisingly, during the aftermath hotel performance at Brussels hotels plummeted, illustrated by the 39.4% year-on-year decline in profit per room in the 12 months to January 2017.

The impact on demand at hotels in the Belgian capital has been most prevalent in the individual and group leisure segments, as the average hotel polled in Brussels has accommodated over 2,500 fewer leisure-related roomnights in the 12 months to January 2017.

In the last 12 months, declines were also recorded in rate in both the individual (-3.9%) and group leisure (-4.0%) segments, contributing to the overall 2.1% drop in achieved average room rate.
However, a 3.6 percentage point increase in room occupancy in January helped to offset the 1.3% decline in achieved average room rate. As a result, hotels in the Belgian capital recorded a 5.3% increase in RevPAR for the month to €75.52, supporting the growth in profit per room.

Profit Crashes in Budapest Despite Revenue Growth

Profit per room at hotels in Budapest fell by 13.3% this month, which was in spite of a 5.7% increase in RevPAR, as escalating costs hit hoteliers in the Hungarian capital.

Hotels in Budapest were able to successfully record increases across a number of revenue streams this month, including Rooms (+5.7%) and Food and Beverage (+1.0%) on a per available room basis, which contributed to the 1.8% year-on-year growth in TrevPAR (Total Revenue per Available Room) to €80.96.

However, cost increases in Payroll (+5.5%) and Overheads (+2.3%) wiped out any increase in revenue and led to a decline in profit per room, which was recorded at just 18.8% of total revenue.

The performance of hotels in Budapest this month is further evidence that there is a widening chasm between RevPAR and other key metrics suggesting the industry’s key performance indicator is no longer the best, single measure of the health of the hotel sector.

Tagged with
%d bloggers like this: