July not so hot for mainland Europe’s hotels: HotStats

Mainland Europe hotels have seen better months, according to recently released data from HotStats. A 5 percent decline in average room rate led to a decrease in revenue per available room of 3.2 percent year over year in July. And with total revenue not faring better, gross operating profit per available room or the month was down 9.4 percent year over year, the firm reported.

In addition to being the sixth month of a YOY GOPPAR decrease in the region since January, it also showed the greatest profit decline this year, the data indicated. Total revenue was challenged by falling ancillary revenues that included a 1.7 percent decline in the food-and-beverage department to €45.69 on a per available room basis. As a result, total revenue per available room at hotels in mainland Europe fell 2.8 percent YOY to €191.76.

Despite an increase in costs, led by a 2.8-percent jump in payroll on a per-available-room basis, profit conversion at hotels in mainland Europe remained at 39.2 percent of total revenue.

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Profit & Loss Key Performance Indicators – Mainland Europe (in EUR)

KPI

July 2019 v. July 2018

RevPAR

-3.2% to €137.50

TRevPAR

-2.8% to €191.76

Payroll

+2.8% to €57.46

GOPPAR

-9.4% to €75.12

For hotels in Moscow, the premium profit performance recorded during the 2018 FIFA World Cup was a memory as GOPPAR came back down by 70.7 percent YOY in July to €54.76.

Despite hotels in the Russian capital successfully recording the highest room occupancy of the year so far—87.9 percent—this was of little reward, noted HotStats, as average room rate fell by €157.06 to €92.86, contributing to a 62-percent YOY decline in RevPAR to €81.58. Moscow hoteliers’ ancillary revenues also fell 29 percent in July, 

And while hotels in the Russian capital recorded a 9.4 percent savings in payroll, this was scant compensation against the €132.22 YOY drop in GOPPAR, the data suggested.

Profit & Loss Key Performance Indicators – Moscow (EUR)

KPI

July 2019 v. July 2018

RevPAR

-62.0% to €81.58

TRevPAR

-55.9% to €116.24

Payroll

-9.4% to €27.91

GOPPAR

-70.7% to €54.76

In France, however, July was a positive month for hotels in Nice, which enjoyed its typical summer bump, fueling a peak in profit levels at properties on the French Riviera, according to HotStats.

Room occupancy hit 90.2 percent and a high was recorded in average room rate at €267.92. The resulting 4.8 percent increase in RevPAR was supported by a 0.9-percent increase in ancillary revenues, which contributed to a 4-percent increase in TRevPAR to €302.63.

Cost savings also helped hotels in Nice record an 8 percent YOY increase in GOPPAR in the month. This was well ahead of the year-to-date profit per room at €52.80, illustrating the strong performance of hotels in the coastal city during the summer season, reported Hot Stats.

Profit & Loss Key Performance Indicators – Nice (EUR)

KPI

July 2019 v. July 2018

RevPAR

+4.8% to €241.68

TRevPAR

+4.0% to €302.63 

Payroll

-3.0% to €82.37

GOPPAR

+8.0% to €141.89