TRevPAR reaches record high at UK hotels in July

Germany and the United Kingdom share the top spot in Europe’s construction pipeline with 246 projects each.
Moxy London Excel, UK. Photo credit: Marriott International

A major  year-over-year increase in RevPAR, along with growth in non-rooms revenues, helped UK hotels hit a record-high TRevPAR, increasing 5.6 percent year-over-year in July.  

According to data from HotStats, TRevPAR at hotels in the UK reached £162.48 per available room in July, which was 0.8 percent above the previous high of £161.14 recorded in September 2017. The increase represented a second consecutive month of TRevPAR growth. 

A 7.9-percent increase in RevPAR, which hit £114.34 this month, drove the growth in total revenue. RevPAR at UK hotels also hit a record high, surpassing the previous high of £107.14 achieved 10 months earlier.

Virtual Roundtable

Post COVID-19: The New Guest Experience

Join Hotel Management’s Elaine Simon for our latest roundtable—Post COVID-19: The New Guest Experience. The experts on the panel will share how to inspire guest confidence that hotels are safe and clean and how to win back guest business.

Hotels in the UK recorded a 1.7-percent increase in room occupancy to 87.1 percent as well as a 5.7-percent increase in achieved average room rate, which soared to a high of £131.21. Achieved average room rate also jumped 4.4 percent ahead of the previous high.

A YOY increase in non-rooms revenues, including a 0.4-percent rise in food and beverage on a per-available-room basis, propelled the growth in rooms revenue in July; however, a 0.6-percent decline in conference and banqueting revenue prevented further TRevPAR growth. 

Hotels in the UK recorded a 0.6-percent savings in payroll, which fell to 24.8 percent of total revenue, on top of the revenue growth. 

Profit per room at hotels in the UK increased 7.2 percent YOY to £71.10 due to the movement in revenue and costs. This was not a record, but it equaled the profit performance of September 2017.

The leisure segment led the high demand levels in July. This sector, which accounted for 36 percent of room nights, surpassed the annual average of 31.9 percent for the 12 months to July this year. 

Increases in the achieved rate in the commercial segment, including the 3.5-percent increase in the corporate sector and the 11.9-percent increase in the residential conference sector, also contributed to growth in TRevPAR. 

“July is not historically a month during which UK hoteliers would expect to be achieving a TRevPAR high. However, soaring demand levels, which have primarily been led by the leisure segment have helped hotels to drive top-line revenues in this month over the last couple of years. The strength of demand has been attributed to an uplift in staycations since the Brexit vote, as well as an increase in international visitors to the UK. The improvement will be to the delight of hotel owners and operators as July presents an opportunity to drive revenue and profit, which previously did not exist,” stated Pablo Alonso, CEO of HotStats.

London

Hotels in London mirrored and exceeded the growth in top- and bottom-line performance for hotels in the UK in July. The city's hotels recorded a 12.8-percent YOY increase in profit per room, which soared to £115.

This was almost 45 percent above the GOPPAR level recorded at hotels in London for year-to-date 2018 at £79.52. Profit per room also was ahead of the previous high recorded in September 2017 at £107.64.

A 9.9-percent increase in TRevPAR, which grew to £226.79, led the YOY growth in profit per room. Meanwhile, increases in non-rooms revenues, including a 1.7-percent rise in food and beverage and a 0.6-percent increase in leisure on a per-available-room basis, drove a 12.5-percent increase in RevPAR to £178.57.

London hotels also recorded a 5-percent YOY decline in revenue in the conference and banqueting department. This decline further proved the leisure segment drove accommodation demand in July.

Hotels in London recorded a 1.3-percent savings in payroll, which fell to 21.3 percent of total revenue. The decline allowed profit conversion to reach 50.7 percent of total revenue.

Volume drove the growth in top- and bottom-line performance for these hotels. Room occupancy rose 4.7-percent to 92.1. Meanwhile, achieved average room rate increased 6.7 percent YOY, reaching £193.90.

“Wimbledon, the Hampton Court Flower Show, the Pride Parade and the British Summertime Festival in Hyde Park, coupled with buoyant domestic and international visitor numbers, helped drive record profit performance for hotels in London in July. Hopefully, properties in the capital can maintain this positive performance to offset the GOPPAR decline so far this year,” Alonso said.

Stratford-upon-Avon

Hotels in Stratford-upon-Avon continued to suffer a decline across all performance metrics in July, despite the UK's increase in visitor numbers. Profit per room saw a sharp 10.9-percent decrease to £42.54, dropping for the sixth consecutive month in the town.

The hotels recorded an increase in volume this month, with room occupancy increasing 1.8 percent to 81.8 percent; however, a 2.4-percent decline in achieved average room rate to £92.24 cancelled out the growth. Stratford-upon-Avon's hotels also saw a decrease in non-rooms revenue, contributing to the 6.7-percent decline in TRevPAR to £124.51.

The 1.3-percent increase in payroll to 31.6 percent of total revenue meant profit conversion at hotels in Stratford-upon-Avon fell to 34.2 percent of total revenue in July. This remained above the conversion for year-to-date 2018 at 27.5 percent.

Suggested Articles

The platform’s new dine-in features provide restaurant patrons safe and secure contactless tableside ordering and payments functionality.

The company’s leadership expressed hope that an increase in business transient demand would compensate for a drop in leisure demand.

U.S. occupancy has risen week over week for 15 of the last 16 weeks, although growth in demand has slowed.