UK hotels saw a second consecutive month of profit decline in March, according to the latest data tracking full-service hotels from HotStats.
GOPPAR for the month settled in at £35.44, a 4.4% year-over-year decline, and the firm said this continued the “downward trend” in this measure since the start of 2019.
Despite the 0.5% increase in RevPAR, non-rooms revenues dropped by 0.4% in the month to 36.2% of total revenue. The drop in ancillary revenues included declines in food and beverage (down 0.7 percent), conference and banqueting (down 1.3%) and leisure (down 0.5%), on a per-available-room basis.
Despite this, hotels managed to “eke out” a small 0.2% gain in YOY TRevPAR, which has now increased in each of the past five months. But the increase was wiped out by rising costs, which included a 0.5-percentage-point increase in payroll as a percentage of total revenue to 32.8%.
A statement by Hotstats read: “The most major increase in overheads was in utility costs, which increased by 8.7% YOY to £5.98 per available room, equivalent to 4.8% of total revenue. This was closely followed by an 8.2% YOY increase in sales and marketing expenses.
“As a result of the movement in revenue and costs, profit contribution at hotels in the UK was recorded at 28.7% of total revenue, which is well below the average in the rolling 12 months to February 2019, at 38.2%.”
Michael Grove, director of intelligence and customer solutions at HotStats, added: “While top-line numbers have actually been positive—albeit slightly—rising costs are having an adverse impact on flow through.”