Record revenue per available room levels helped hotels in the UK maintain their strong period of top- and bottom-line growth in 2017. The 4.4-percent year-on-year increase to £105.28 for the month also fueled a 3.8-percent increase in gross operating profit per available room, according to the latest worldwide poll of full-service hotels from HotStats.
The record RevPAR levels exceeded the previous high of £103.78, which was recorded in September 2016. A 0.2-percent increase in room occupancy to 85.3 percent—also a record for full-service hotels in the UK—helped boost revenue across the board.
“Despite recent reports that over 7,500 hotel rooms have opened in the UK since the beginning of 2017, the highest number of additions since 2012, market performance is going from strength to strength led by room occupancy levels which are giddily high,” Pablo Alonso, CEO of HotStats, said in a statement.
Despite the record RevPAR, the margin of growth in total RevPAR this month was limited to a 3.0-percent increase to £153.05, hampered by falling non-rooms revenues. This decrease included food & beverage, which was down 1.4 percent, and conference and banqueting, which was down 4.0 percent on a per available room basis. That said, cost savings helped to offset the decline in non-rooms revenue, which included a 0.1-percent reduction in payroll to 25.3 percent of total revenue. As a result, hotels in the UK recorded their highest gross operating profit per available room of the year so far at £66.12, equivalent to a profit conversion of 43.2 percent of total revenue.
Bristol
Bristol was one of the top performing markets in the UK this July due to the annual Harbour Festival — which reportedly attracted over 200,000 visitors this year — and demand overflowing into nearby cities from major events in Cardiff. The volume of demand helped hotels in the South West city to achieve a 84.4-percent occupancy. Combined with an achieved average room rate of £93.97, the high occupancy levels contributed to a RevPAR increase of 7.9 percent to £79.31 since July 2016.
While this was strong performance, it did not surpass the record RevPAR of £85.05 achieved in the city in June, which was once again a result of demand exceeding supply following a major event in Cardiff (i.e. The Champions League Final).
“In addition to the South West city benefiting from a wealth of demand generators, its proximity to Cardiff and excellent transport links means that more and more hoteliers in Bristol are benefiting from displaced demand associated with major events in the Welsh capital. This month, demand was driven by Coldplay playing two dates at The Principality Stadium,” Alonso said.
Although the volume of demand in the city helped drive premium RevPAR levels, this was not translated into growth in non-rooms revenue. There were significant declines recorded in food and beverage by 7.7 percent and conference and banqueting revenue by 13.9 percent this month. As a result, the year-on-year growth in total RevPAR at hotels in Bristol was limited to a 2.4-percent increase to £116.31. Meanwhile, GOPPAR saw a increase of 16.9 percent to £46.00, although payroll dropped by 4.4 percent to 26.9 percent.
London Heathrow Airport
Heathrow hoteliers also hit an annual high in July, as the airport recorded its best-ever single month in history, handling 7.53 million passengers—equivalent to an average of 243,000 passengers per day. The bumper demand levels, which pushed room occupancy to 92.9 percent for the month, helped fuel a 6.7-percent increase in TrevPAR to £105.12, with non-rooms revenue comprising just 28.5 percent of total revenue.
The growth in total revenue and a 1.1-percent saving in payroll to 25.9 percent of total revenue helped Heathrow hotels record a 16.9-percent year-on-year increase in gross operating profit per available room in July to £43.92. This represented a profit per room peak for Heathrow hoteliers in 2017 up 8.4 percent to £75.10.