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Hotels in the UK Post Positive Results in Q3 2019

Hotels in the UK managed to end Q3 2019 on a high note, reaching gains in such key metrics as revenue per available room (RevPAR) and gross operating profit per available room (GOPPAR). Hoteliers could keep their profit per available room higher than a year ago for two consecutive months already. This is a good sign after months of flat revenues, so hoteliers in the UK start hoping for the start of a positive trend.

This boost in revenues became possible thanks to a boost in the average room rate. This important metric added 5.0% in September 2019 compared to the same month a year ago. Together with the gain in occupancy by 0.8%, the year-on-year growth of RevPAR added 3.9%. Leisure and corporate segments played an important role in this positive change. The increase in RevPAR of these segments estimated 2.1% and 5.1% respectively. These two segments are responsible for more than half (50.3%) of all room nights sold in the UK in September 2019.

The results of other segments are not so glorious. For example, the decrease in conference and banqueting revenues reached 4.5% year-on-year, while ancillary and food & beverage revenues fell by 2.4% and 2.6% respectively. The increase in labor cost by 2.2% and the growth in overheads by 0.7% still couldn’t make the profit negative, so GOPPAR reached ₤69.98 (+1.6%).

Naturally, some destinations across the UK performed better than others. Hotels in Brighton were among leaders in September 2019. Boosted by the annual conference of the Labour Party, which took place from September 21st to September 25th, local hotels managed to increase their profit per available room by fantastic 17.1% year-on-year. RevPAR of hotels in Brighton reached ₤109.02 (+13.0%).

Unfortunately, some popular destinations posted poor results in September 2019, and Liverpool hotels were among them. Rains and flooding in the region made fewer travelers want to visit the city. Consequently, GOPPAR fell down by robust 28.9% year-on-year. The drop in occupancy reached 5.9%, and the decrease in room rate estimated 8.4%, making RevPAR fall by 14.9%. This is the biggest decrease in revenues for hotels in Liverpool in the past two years. Even ancillary revenues were significantly lower than a year ago as their decrease estimated 11.4%. Even small drops in labor cost and payroll (below 1%) were not enough to offset the decline in profit.

02.11.2019

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