2019 ended on a sour note for UK hotels. According to HotStats data, December marked the third consecutive month of year-over-year profit per available room decrease, as GOPPAR was down 0.9%. In sum, there were nine months in 2019 that saw YOY GOPPAR contraction.
Average rate (up 2.5% YOY) drove rooms revenue growth in December, leading to a 0.1% YOY uptick in RevPAR despite the 1.7-percentage-point YOY drop in occupancy. Ancillary revenue, on the other hand, fell by 0.7% compared to December 2018, mostly due to a 2.1% decline in F&B revenue per available room. As a result, TRevPAR recorded a 0.2% YOY decrease.
UK hoteliers were able to keep overheads under control in December, placing 4.5% below the same month of 2018. This reduction was led by a 2.5% YOY drop in utility expenses. However, the 3.8% increase in total labour costs on the back of shrinking revenue took a toll on profitability. Thus, GOPPAR for the 2019 financial year closed 0.8% below that of 2018.
Profit conversion in the UK was recorded at 38.4% of total revenue in December.
Profit & Loss Performance Indicators - Total UK (in GBP)
Conversely, the city of Bristol marked its eighth consecutive month of profit per available room YOY growth in December, at 5.7%. This increase in profit was achieved despite a contraction in revenue.
A 3.2-percentage-point plunge in occupancy drove RevPAR down 1.4% YOY, despite a 3.5% YOY increase in average rate. A further 0.7% YOY drop in ancillary revenue resulted in a 1.1% fall in TRevPAR compared to December 2018.
Even though overheads increased by 2.6% YOY, the ability of Bristol hoteliers to flex labour costs enhanced their profit in the context of diminished revenue. The contraction of both rooms labour costs (down 5.1% YOY) and F&B labour costs (down 8.9% YOY) placed December total payroll 1.3% below the same month of 2018. Consequently, GOPPAR for the financial year 2019 was 3.4% higher than 2018.
Profit conversion in Bristol was recorded at 33.3% of total revenue in December.
Profit & Loss Performance Indicators - Bristol (in GBP)
Results were bleaker in the city of Northampton, where December marked the 11th month (ninth in a row) of YOY GOPPAR decrease, at 5.0%.
Declines in occupancy (down 0.9 percentage points YOY) and average rate (down 3.7% YOY) resulted in a 5.0% plunge in RevPAR compared to December 2018. Ancillary revenue was also part of this downward trend and recorded an 8.1% YOY fall. Consequently, TRevPAR dropped by 6.6% YOY.
The silver lining is that expenses also contracted in this period. Fueled by an 8.3% fall in F&B payroll, total labour costs were reduced by 9.1% YOY. Also, a 10.9% fall in utility expenses helped bring overheads down by 18.7% YOY. However, this was not enough to offset the dwindling top-line, and GOPPAR for 2019 placed 11.4% below 2018.
Profit conversion in Northampton was recorded at 30.8% of total revenue in December.
Profit & Loss Performance Indicators - Northampton (in GBP)
About HotStats
HotStats provides a unique profit-and-loss benchmarking service to hoteliers from across the globe that enables monthly comparison of hotels' performance against competitors. It is distinguished by the fact that it maintains in excess of 500 key performance metrics covering 70 areas of hotel revenue, cost, profit and statistics, providing far deeper insight into the hotel operation than any other tool. The HotStats database totals millions of hotel rooms worldwide. For more information, visit www.hotstats.com.
