In the absence of any occupancy growth this month, the 5.5% increase in achieved average room rate at hotels in UK North West was responsible for fuelling a 3.5% year-on-year profit increase in the region, according to the latest data from HotStats.
August is typically one of the most operationally challenging months of the year due to a marked step down in commercial demand, but hotels in the North West were once again able to leverage price due to strong volume, as they have done for the majority of this year.
The 5.6% increase in RevPAR (Revenue per Available Room) in August was somewhat diminished by declining ancillary revenues, including Food and Beverage (-4.2%) and Conference and Banqueting (-10.6%) on a per available room basis, which resulted in North West hoteliers achieving year-on-year TRevPAR (Total Revenue per Available Room) growth of 1.9%.
However, the growth in profit per room in August contributed to what is shaping up to be another positive year of performance for hotels in the North West, recording a year-to-date profit increase of 3.1% to £33.21 from £32.21 during the same period in 2015.
Profit Falls at Heathrow Hotels as Growth in Passenger Numbers Slows
Profit per room at hotels at Heathrow fell by 11.2% this month as the airport recorded a year-on-year increase in passenger numbers of less than 0.1%.
Whilst hotels at Heathrow achieved a 2.8% increase in achieved average room rate, to £68.59, it was not sufficient to offset the 5.8 percentage point decline in occupancy, as the proportion of demand attributed to the leisure and corporate segments declined, and RevPAR fell by 3.9% to £57.32.
Year-to-date passenger numbers at Heathrow Airport are ahead of last year by 0.7%. However, this is in contrast to the year-to-date decline in RevPAR performance at hotels in proximity to the UK’s busiest airport, which fell by 2.5% in the eight months to August 2016 to £60.34.
Despite an 18.9% increase in revenue from the conference and banqueting department softening the TRevPAR decline to just 3.3%, rising labour costs (+4.5%) on a per available room basis contributed to the 11.2% profit drop.
Bumper August Punctuates York Hoteliers Recovery from Winter Flooding
Hotels in York recorded a 15.5% increase in RevPAR in August, fuelling an 8.1% increase in profit per room for the month, helping to alleviate the memories of plummeting performance as the flood waters surged in January.
As one of the UK’s most popular tourist destinations, August is always a key month for the city’s hoteliers and this year proved to be a strong period of operation, with hotels achieving a 4.2 percentage point increase in occupancy, in addition to a 10.0% increase in achieved average room rate.
Despite a poor start to the year due to the severe flooding in the city, York hotels have now recorded strong RevPAR growth across the eight months to August 2016.
However, it has not been without some investment, with significant increases in Rooms Cost of Sales (+23.4%) and Sales and Marketing Expenses (+39.8%) this month suggesting that hotels in York are deploying online resources, such as third party agents, to drive demand.
Despite the strong growth in revenue and subsequent profit per room uplift, as a result of the increase in costs, profit conversion at hotels in York dropped to 34.6% of total revenue in August, compared to 36.3% during the same period in 2015.
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