Despite room occupancy levels soaring to a new high at hotels in Leeds, year-on-year profit per room plummeted by 9.5 per cent this month, according to the latest data from HotStats.
In the 12 months to March 2017, room occupancy levels at hotels in Leeds have climbed to a record 77.6 per cent, with a 5.5 percentage point year-on-year increase recorded for Q1 2017, which is on the back of a 3.8 percentage points increase in March.
And whilst average room rate has stumbled a little for year-to-date 2017, falling by 0.2 per cent to £73.84, this has been more than offset by the significant increase in volume, which has resulted in Leeds hoteliers recording a 7.7 per cent increase in RevPAR (Revenue per Available Room) for Q1 2017.
However, as a result of declining non-rooms revenues, the 5.9 per cent increase in RevPAR in March was completely cancelled out and resulted in Leeds hoteliers suffering a 1.2 per cent decline in TrevPAR (Total Revenue per Available Room) to £107.73.
Furthermore, increases in both Payroll (+1.5 per cent) and Overheads (+1.0 per cent) on a per available room basis contributed to the 9.5 per cent drop in profit per room, to £35.55.
Hotels in Nottingham Set Solid Foundation for Continued Profit Growth in Q1 2017
Further to the growth in profit per room at Nottingham hotels in both 2015 (+3.9 per cent) and 2016 (+7.8 per cent), properties in the East Midlands city have recorded a 10.7 per cent increase in profit per room for Q1 2017, setting a solid foundation for another successful year.
Top line performance at hotels in Nottingham continues to grow at pace for year-to-date 2017, driven by increases in both room occupancy (+3.6 percentage points) and achieved average room rate (+4.6 per cent), which contributed to the 10.4 per cent increase in RevPAR for Q1 2017. This is almost double the growth in the same measure in the Provincial UK during the same period, at +5.9 per cent.
Despite cost creep in both payroll (+9.0 per cent) and overheads (+5.9 per cent) on a per available room basis, the growth in revenues at hotels in Nottingham was sufficient to fuel the 10.7 per cent increase in profit per room for the first three months of 2017, which was driven by a 16.1 per cent increase in March.
With no new supply expected to enter the market in the foreseeable future, hotels in Nottingham look set to maintain an upward performance trajectory in 2017 and potentially beyond.
Strong Performance of South East Hotels Led by Commercial Segment
Hotels in the South East recorded an 11.4 per cent year-on-year increase in profit per room this month due to cost savings as well as growth in top line performance, which was led by the commercial segment.
Increases in the achieved rate recorded in both the corporate (+3.7 per cent) and residential conference (+11.9 per cent) segments in March contributed to the 3.5 per cent increase in the overall achieved average room rate at hotels in the South East, to £85.95.
Primarily as a result of the robust year-on-year growth in achieved average room rate, hotels in the South East recorded a 4.9 per cent increase in RevPAR for the month, to £61.94.
In addition to the growth in rooms revenue, an increase in non-rooms revenue on a per available room basis, which included the Food and Beverage (+3.4 per cent) and Conference and Banqueting (+12.0 per cent) departments, fuelled a 4.2 per cent increase in TrevPAR to £108.03.
The growth in revenue as well as cost savings, enabled hotels in the South East region to record an 11.4 per cent increase in profit per room for the month, which contributed to the 5.6 per cent increase in this measure for Q1 2017, to £27.31, equivalent to a profit conversion of 27.6 per cent of total revenue.
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