Autumn blues lead to profits slump at UK hotels

Profit per room at hotels in the UK fell by 4% in September, as a summer marked by GOPPAR growth came to a halt and demand levels shifted toward a more business-led mix.

According to the latest data tracking full-service hotels from HotStats, the drop in profit was primarily due to a 1.3% decline in rooms revenue, which fell to £105.77. This was in contrast to an increase in non-rooms revenue, which included an uplift in food and beverage (up 0.8%) and conference and banqueting (up 1.7%) revenue, on a per-available-room basis.

Profit and Loss Key Performance Indicators – Total UK (in GBP)

September 2018 v September 2017

RevPAR: -1.3% to £105.77

TrevPAR: -0.9% to £159.66

Payroll: +1.0 pts. to 25.7%

GOPPAR: -4.0% to £68.26

In addition to the 0.2-percentage-point decline in room occupancy in September to 85%, hotels in the UK recorded a 1.1-percent drop in achieved average room rate, which fell to £124.44. The drop in volume and price this month was led by the commercial segment, which suffered a 2% decrease in the achieved rate in the corporate sector to £119.62.

Michael Grove, director of intelligence and customer solutions at HotStats, said: “Whilst hoteliers across numerous markets in the UK would have been glad to see the back of the quieter summer period, unfortunately, the return to business as usual has been blighted by a return to the challenging trading conditions of early 2018.

“This is unsurprising due to the relatively stagnant UK economy, with GDP growing by just 0.5 percent in Q3 2018, and the UK being slow to come back to work following such a celebrated summer period.”

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