Positive News for the Hotel Sector

Positive News for the Hotel Sector

There are several articles this week confirming the hotel industry is reporting an increase in profit for 2018. As one our main key services, we have received refurbishment projects for several hotels throughout the UK for this year. This article from Hotel Owner explains the announcements further:

December’s increases in both TRevPAR and GOPPAR were not ‘overly impacted’ by the 3% YOY increase in total labour costs

A strong finish to 2018 secured a second consecutive year of GOPPAR (gross operating profit per available room) growth for UK hotels, according to the latest data from HotStats.

The UK recorded a 6.7% year-on-year increase in profit per room in December, helping hotels to a 1.6% YOY increase in GOPPAR for 2018. However this is down from the 5.1% YOY increase in GOPPAR set in 2017.

HotStats found that profit growth in December was led by increases in the rooms (7.2%) and food and beverage (1%) and came despite declines in conference and banqueting (-1.7%) and leisure (-2.8%) revenue, on a per-available-room basis. Despite the uneven contribution still resulted in a 5.2% uptick in TRevPAR in the month to £147.38.

It also revealed December’s increases in both TRevPAR and GOPPAR were not “overly impacted” by the 3% YOY increase in total labour costs on a per-available-room basis.

Meanwhile, as a percentage of total revenue, payroll costs fell by 0.5 percentage points to 27.3 percent of total revenue in the month.

On a per-available-room basis, total overheads were found to be up for the year, growing 3.3% YOY. This came as a result of increases in “key undistributed operating expenses”, including admin (2.1%), property and maintenance (5.7%) and utilities (9%).

Michael Grove, director of intelligence and customer solutions, EMEA, at HotStats, said: “The UK hotel market is strong despite it being entrenched in the mire of Brexit and the impact on the economy as a whole. Regardless of the macro climate, and as evidenced by December’s strong profit numbers, savvy hoteliers are wringing out as much revenue gained on the top line, leading to solid bottom-line growth.”

Read the full article here >