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UK Hotels Suffer from Poor Performance in April 2019

News April was a challenging month for the hospitality industry of Europe. After hotels in mainland Europe, their colleagues from the UK reported challenges. With costs rising and revenues falling, local hotels suffered the largest year-on-year decline in profit since 2016. RevPAR (revenue per available room) fell by only 1% to £87.39, but GOPPAR (gross operating profit per available room) lost 10% year-on-year to £43.22.

Non-room revenues declined even more significantly. Food & Beverage department posted a decline of 6.4%, and Conference & Banqueting was down 14.2%. Because of this, TRevPAR of hotels in the UK fell for the first time in 2019, -2.6% to £131.97 if compared to March 2019. The year-on-year result of TRevPAR in April 2019 is still 0.2% higher.

Soaring costs made it even more challenging for hotels in the region to maintain their profit. Payroll added 2.8% in April, growing to 31.2% of total revenue (£41.16). The resulting profit decline of 10% is not something the hospitality industry of the UK experiences often – the latest decline of more than 10% happened in October 2016 (-11.6%). Experts name several reasons for poor performance. Unfinished Brexit and late Easter are among the most popular ones.

As usual, not all destinations performed the same. Hotels in Stratford-upon-Avon could avoid harsh declines because of Easter timing that coincided with such events as the RSC Theatre and Guildhall. It helped to increase RevPAR by 10.3% to £64.30. Ancillary revenues added 2.8%, boosting TRevPAR to £109.92 (+7.0%). Payroll, however, grew by 10.9% to £42.40, and because of this GOPPAR ended up in the red zone (-1.2% to £28.62).

Hotels in Reading, in their turn, had a positive month. They managed to increase their RevPAR to £62.08 (+4.2%). As payroll remained virtually flat in April 2019 (+0.9% to £114.09), Reading hotels reached an impressive profit growth. GOPPAR added 16.4% to £39.95. April 2019 once again proved the ongoing upward GOPPAR trajectory. Other major metrics only prove this trend. ARR has been growing for eight months in a row (£89.69 in April 2019), and the occupancy was growing for six consecutive months in a row to 69.2%. TRevPAR added 6.6% year-on-year to the level of £114.09.


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