South West hoteliers on course for third consecutive year of profit growth
Profit per room at chain hotels in the South West region of the UK fell by 5% year-on-year in October, but remains on course for a third consecutive year of growth.
The latest UK Chain Hotels Market Review, from HotStats, found further to the growth in 2014 and 2015 – 9.5% and 11.7%, respectively – gross operating profit per available room (GOPPAR) at hotels in the South West has increased by 2.6% for the year to date to £33.02.
The decline in profit in October was the largest monthly year-on-year drop in the region in 2016 and may be related to the demand associated with the Rugby World Cup 2015 fixtures hosted in the South West this time last year at venues in Exeter, Gloucester and nearby Cardiff.
As a result, year-on-year occupancy levels in the South West fell by 2.2% to 77.1% this month, with a 1.4% decline also recorded in achieved average room rate. Decreases were recorded in both the conference (7.8%) and group tours (6.1%) segments.
Despite the decline during the month, hotels in the region have recorded a 30.9% increase in profit per room in the 36 months to October 2016, to £32.51.
Elsewhere, hotels in Edinburgh recorded an 18.4% increase in profit per room this month, which was primarily fuelled by growth in international visitors to the city.
As a result of top line increases in both room occupancy (1.9%) and achieved average room rate (10.1%), hotels in the Scottish capital recorded a 12.7% increase in revenue per available room (RevPAR) for the month – to £92.29.
Consistently strong occupancy levels – averaging 82.6% in the 12 months to October 2016 – have enabled Edinburgh hoteliers to leverage rates across the majority of segments, illustrated by the increase in the achieved rate in the corporate (6.4%) and leisure (14.9%) segments.
The report said the strong demand for hotel accommodation is a direct reflection of the “continued success” of Edinburgh Airport, which handled 1.1 million passengers in October – a 12.5% year-on-year increase on the same period last year.
Meanwhile, the addition of approximately 820 bedrooms to the Newcastle hotel market has contributed to a 7.1% year-on-year decline in RevPAR, and a subsequent 8% drop in profit per room for the year to date.
Since the beginning of 2015, additions to the market have included a 160-bedroom Hampton by Hilton, 222-bedroom Motel One, 251-bedroom Crowne Plaza and 184-bedroom Premier Inn, which have contributed to the 3.8% fall in room occupancy and the 2.4% drop in achieved average room rate.
