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Strong Results of European Hotels

Hotels in many European destinations had a powerful start of the year in January, and many of them managed to keep their results high in February as well. The average increase in profit-per-room reached 8.3%. Hotels in the region achieved growth in all revenue departments and efficient cost saving only helped to get higher revenues.

The growth operating profit per available room (GOPPAR) grew to 31.30 euro in February, helping hotels in the region to reach an important milestone – ten consecutive months of profit growth. The average profit per room in the period of February 2017 – February 2018 estimated 59.17 euro, which is 8.3% higher than during the same period of 2016/2017. Thanks to an increase in main metrics, TrevPAR (total revenue per available room) reached 141.52, driven by the growth in Food and Beverage departments (+1.7%), Room revenues (+4.3%), and Conference and Banqueting (+2.3%).

The achieved room rate grew by 3.4% in February to 143.11 euro in total, and the average occupancy of European hotels added 0.6% to 62.8%. It is important to mention that high demand was still the main reason for the positive results of European hotels. The results were particularly strong in the Corporate and Residential and Conference sectors that enjoyed the growth of 8.1% and 6.4% respectively. Individual Leisure segment remained nearly flat (+0.8%).

Here are the key metrics of the region in February 2018. RevPAR added 4.3% to 89.87 euro in total, TrevPAR grew by 3.2% to 141.52 euro, and the increase in GOPPAR was 8.3% to 31.30 euro. Hotels in Madrid were among the best performers of the month. They enjoyed a 24.1% year-on-year profit growth (38.79 euro). Hotels in the Spanish capital were able to make their daily rates up by 6.7% to 150.70 euro. Together with the growing demand of 1.1%, this led to an increase in RevPAR of 8.4%. Madrid hotels enjoyed such a strong month mostly thanks to the growth in the commercial sector.

Hotels in Munich, in contrast, had a very poor month. In February 2018, they suffered from a 36.4% decline in profit per room. There were no big events in the city on this month as well. This year’s Munich Security Conference was a smaller event compared to the 2017 conference when almost 700 participants visited Munich. The year-on-year room occupancy fell down by 13%, and room rates fell down by 2.6% to 148.85 euro. This caused RevPAR fall by 18.8%. Non-Room Revenues were also falling, making TrevPAR fall even more. Consequently, GOPPAR fell to 36.49 euro, and the year-on-year profit dropped by 28.1%.

08.04.2018

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