Hotels in Bristol recorded a 19.8 per cent increase in profit per room this month, which is more than double the growth in the Provincial UK as the city buzzed with activity, according to the latest data from HotStats.
Whilst hotels polled in both Bristol and the Regional UK recorded an 8.2 per cent increase in RevPAR (Revenue per Available Room) for the month, at £90.07, the achieved rate at hotels in the South West city was more 5.1 per cent above the Regional performance (£85.70).
Robust increases in top line performance were helped by year-on- year growth across most market segments and bolstered by a range of events, including the 3rd largest 10k race in the UK, with 13,000 participants, the ‘Love Saves the Day’ festival and VegFest, which all contributed to the 2.7 percentage point increase in room occupancy and the 4.5 per cent year-on-year increase in achieved average room rate.
However, it was via cost cutting measures that Bristol hoteliers have shown themselves to be most shrewd, illustrated by their ability to convert a 7.7 per cent increase in TrevPAR (Total Revenue per Available Room) to a 19.8 per cent increase in profit per room. This is compared to the 8.5 per cent increase in profit per room at the overall Provincial UK market, on the back of a 5.9 per cent increase in TrevPAR.
The astute cost cutting was further exemplified by the 2.3 percentage point year-on-year drop in payroll this month, which fell to 29.0 per cent of total revenue and helped to drive a 35.3 per cent profit conversion.
Huge Occupancy Growth for Aberdeen Hotels Fails to Reach the Bottom Line
Despite recording a 6.5 percentage point year-on-year increase in room occupancy this month, hotels in Aberdeen still suffered a 2.8 per cent decline in profit per room.
Whilst the significant increase in room occupancy this month, to 72.0 per cent, was almost entirely wiped out by an 8.7 per cent decline in achieved average room rate, to £61.85, Aberdeen hoteliers clung on to achieve a 0.4 per cent increase in RevPAR, to £44.55.
Due, in part, to the uplift in volume, TrevPAR at hotels in Aberdeen increased by 1.7 per cent year-on-year, to £71.06, helped by a 4.5 per cent increase in Food & Beverage revenue per available room, to £20.80.
However, the positive TrevPAR story this month belies the continuing challenges to profitability, which begin in the Rooms Department, where Rooms Cost of Sales increased by 14.8 per cent year-on-year, to £3.87 per available room, equivalent to 8.9 per cent of Rooms Revenue.
In addition, with a 3.7 per cent increase in Rooms Payroll and a 10.3 per cent increase in Rooms Expenses, it is unsurprising that Rooms Department Profit dropped by 3.0 per cent year-on-year, to £29.26.
Overall, profit per room at Aberdeen hotels fell to £17.57 this month, which was in spite of a 0.4 percentage point saving in total Payroll, to 33.0 per cent.
North East Hoteliers Caught Out by Creeping Costs
Profit per room at hotels in the North East declined by 4.8 per cent this month due to increases in key costs, including Payroll (+2.6 per cent) and Overheads (+2.8 per cent) on a per available room basis.
The decline was in spite of a 1.1 per cent increase in RevPAR as hotels in the region benefited from a 2.2 percentage point increase in occupancy, which offset the 1.7 per cent average room rate decline, to £73.52.
The decline this month is in contrast to the reasonably strong start to the year for hotels in the North East, illustrated by the 3.7 per cent year-to-date increase in RevPAR, which contributed to the 2.6 per cent year-to-date increase in profit per room.
However, HotStats data suggests that the achieved average room rate at hotels in the North East is under pressure, with declines this month recorded across key segments, including Best Available Rate (-6.3 per cent), Corporate (-0.9 per cent) and Leisure (-3.8 per cent).
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