UK hotel chains see strong numbers in Scotland, Leeds

HotStats has released its UK Chain Hotels Market Review for November 2013, with some notable improvements for hotels throughout Scotland and in the English city of Leeds. Southampton, on the other hand, experienced mixed results, with a rise in demand but a drop in the average room rate.

Scottish hotels see sustained revenue and profit growth

In November, hoteliers in Scotland saw a 6.3 percent increase in total revenues per available room and a 6.5 percent rise in gross operating profit per available room, representing 14 consecutive months of year-on-year increases, according to the latest HotStats survey. 

A simultaneous rise in occupancy of 3 percentage points and in average room rate of 1.3 percent helped to increase revenue per available room by 5.5 percent to £57.65. Additional revenue growth per available room in beverage (14.7 percent to £11.52), food (8.1 percent to £22.68) and meeting room rentals (2.6 percent to £4.30) as well as leisure (4.8 percent to £4.80) contributed to a TrevPAR uplift of 6.3 percent to £104.05, compared to £97.92 for the same period last year.

Efficient operational cost control enhanced departmental operating profit per available room by 6.8 percent to £54.62 and this, coupled with a significant drop in overheads per available room by 7.0 percent and a minor increase 0.3 percentage point in payroll produced a GOPPAR surge of 6.5 percent to £27.30.

Leeds reaches record numbers

Leeds hotels in November achieved the highest performance growth recorded in absolute figures over the last four years with double digit increases in TrevPAR and GOPPAR by 11.0 percent and 22.1 percent respectively, according to the latest HotStats

Both occupancy and ARR surged by 6.1 percentage points to 83.4 percent and 6.4 percent to £71.17 leading to a 14.9 percent increase in RevPAR to £59.32. Segment mix changed with rises in the volume of Best Available Rate residential conferences as well as tours & groups, which canceled out a slight decline in corporate and leisure sectors, the two biggest segments. 

Non-rooms revenues growth per available room derived from food (+7.9 percent), beverage (9.9 percent), meeting room rental (18.0 percent) and leisure (2.6 percent) led to a TrevPAR rise of 11.0 percent to £113.04. Operational cost control helped to convert revenue gains into a 16.8 percent increase in DOPPAR to £63.23. Although overheads per available room rose notably by 10.0 percent, payroll decreased by 1.8 percentage points and GOPPAR consequently increased by 22.1 percent to £36.95.

Southampton gets RevPAR increase but profit decline

In November, hotels in Southampton demonstrated the importance of looking beyond RevPAR. Hoteliers in the coastal city saw demand levels increase as occupancy rose by 3.5 percentage points to 72.1 percent, but this was at the expense of average room rate (-1.9 percent). As a result, RevPAR grew by 3.0 percent to £42.99. However, mixed performances were recorded in other non-rooms departments and TrevPAR went up only by 0.9 percent to £81.15. But with cost of sales increasing, especially with a 26.2 percent rise in travel agents commission per room let and with overheads per available room rising by 3.8 percent, payroll efficiency was not enough to offset a 5.2 percent decline in GOPPAR.

On a calendar year basis, the picture is still positive with hoteliers in Southampton reporting increases in TrevPAR and GOPPAR by 3.0 percent and 2.2 percent respectively, but GOP conversion deteriorated slightly to 25.5 percent from 25.7 percent compared to the same period last year.