European Chain Hotels Market Review – July 2015

Both Barcelona and Paris hotels achieved noteworthy year-on-year increases in gross operating profit per available room (GOPPAR) in July by 24.9% and 16.6% respectively, according to the latest data from HotStats.

Both Barcelona and Paris hotels achieved noteworthy year- on-year increases in gross operating profit per available room (GOPPAR) in July by 24.9% and 16.6% respectively, according to the latest data from HotStats.
July was a strong month for Barcelona as the city registered an 18.5% increase in revenue per available room (RevPAR) thanks to a 1.5 percentage point uplift in occupancy combined with a 16.6% growth in average room rate (ARR). Further increases were reported in revenues per available room derived from food (+16.1%), beverage (+14.7%) and meeting room hire (+4.3%) which further supported the total revenue per available room (TRevPAR) growth of 17.1%. A decrease in payroll (-1.7 percentage points) resulted in departmental operating profit per available room (DOPPAR) rising by 21.8% to €198.64 leading to a GOPPAR growth of 24.9% to €151.61.
Hotels in the French capital simultaneously increased occupancy (+5.1 percentage points) and average room rate (+5.1%) to produce a RevPAR uplift of 11.6% in the month of July. ARR growth was most notably fueled by a 15.6% hike in the leisure segment rate to €413.89. Despite overheads per available room rising by 11.8%, an overall 2.1 percentage point decrease in payroll helped hoteliers produce the GOPPAR increase of 16.6%.
…Along with Frankfurt and Moscow
Demand in Frankfurt hotels increased by 2.8 percentage points during the month of July in addition to an ARR increase of 3.3%, leading to a RevPAR uplift of 7.3% to €92.68. TRevPAR levels also grew by 7.3% and payroll decreased marginally by 0.2 percentage points. Total food revenue per available room along with total beverage revenue per available room increased by 15.2% and 11.7%, respectively. As a result, DOPPAR increased by 8.8% and despite the 10.2% increase in overheads per available room, GOPPAR climbed by 7.2% to €33.91.
In July, Moscow hotels also increased occupancy by 7.5 percentage points but at the expense of ARR declining by 7.7%, and as a result RevPAR grew by 2.6%. A closer examination of the market segmentation showed rate reductions in the Best Available Rate sector (-17.8%), while the Corporate and Conference sectors increased by 26.5% and 55.4% respectively. In the meantime, hoteliers managed to control operating costs and recorded a reduction in overheads per available room of 3.5% altogether delivering a GOPPAR uplift of 13.6% to €33.80.
RevPAR up but profits down in Brussels
Hotels in Brussels experienced a challenging month of July despite a 2.8 percentage point increase in demand. The Brussels hotel market indicated once again that RevPAR alone can be a misleading indicator of hotel performance because despite the 5.4% rise for this metric there was a GOPPAR decrease of 13.0%. Although TRevPAR levels increased by 4.5% to €109.35 the payroll hike of 4.5 percentage points led to a DOPPAR decrease of 4.6% to €50.15 ultimately resulting in the GOPPAR decline of 13.0% to €18.09 compared to the same period last year. 

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