Despite recording a 1.3 per cent increase in Total Revenue this month, hotels in Hamburg suffered a 5.2 per cent decline in profit per room as a result of escalating costs, according to the latest data from HotStats.
The growth in TrevPAR (Total Revenue per Available Room) was primarily as a result of an increase in Rooms Revenue (+2.9 per cent) and was in spite of declines in Non-Rooms Revenues, including Food and Beverage (-4.2 per cent) and Conference and Banqueting (-23.9 per cent).
Although hoteliers in Hamburg successfully recorded an increase in RevPAR (Revenue per Available Room), the growth in this measure was largely due to a 3.8 percentage point increase in occupancy, as achieved average room rate fell by 1.6 per cent to €165.02, which meant hoteliers were working harder for less reward.
The decline in April is further to the positive start to the year, during which year-on-year growth in profit per room was recorded at +8.4 per cent in Q1 2017, to €42.40. This was in spite of cost increases being recorded in both Payroll (+3.7 per cent) and Overheads (+3.5 per cent) on a per available room basis.
The biggest overall cost for hotels in Hamburg remains payroll, which, this month increased by 0.4 percentage points, to 27.6 per cent of total revenue, from 27.1 per cent during the same period in 2016.
RevPAR Growth Comes at a Cost for Hotels in Madrid
Whilst hotels in Madrid successfully recorded a 15.4 per cent increase in RevPAR this month, it was at the expense of a 12.8 per cent increase in Rooms departmental costs.
As a result of increases in both room occupancy (+5.9 percentage points) and achieved average room rate (+7.0 per cent), Madrid hoteliers recorded a €17.10 year-on-year increase in Rooms Revenue, to €128.31.
However, Rooms profit growth was limited to just €12.71 due to increases in all Rooms department costs, including Rooms Cost of Sales (+27.6 per cent), Rooms Expenses (+12.7 per cent) and Rooms Payroll (+8.2 per cent) on a per available room basis.
That said, steady top line growth has meant that Rooms Profit at hotels in Madrid has increased by 33.1 per cent over the last 24 months to €72.27 in the 12 months to April 2017. This is equivalent to a Rooms profit conversion of 67.7 per cent of Rooms Revenue.
Green Shoots in Paris as Profit Levels Start to Recover
Hotels in Paris recorded an 8.9 per cent increase in profit per room this month, which contributed to the 22.1 per cent increase for year-to-date 2017, which was in spite of declining total revenue levels.
Hotels in Paris have experienced very challenging trading conditions over the last 24 months following a series of security threats, which led to top and bottom line performance plummeting.
Whilst year-on-year RevPAR growth in the French capital was recorded at 3.5 per cent in April, and TrevPAR fell by 2.8 per cent, cost cutting measures enabled hotels in Paris to achieve an 8.9 per cent increase in profit per room, to €34.62.
Despite showing green shoots of recovery in the first few months of 2017, there is still some way to go to return to previous performance levels as in the 12 months to April 2017 profit per room remains 32.9 per cent behind the same period in 2015/16.
Furthermore, although the growth in profit this month, as well as the year -to-date increase, is a clear sign of recovery, at €31.60 in the four months to April 2017, profit conversion at hotels in Paris remained low for the year-to-date, at just 10.0 per cent of total revenue.
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