Parisian hotels enjoy a jump in profits

Hotels in Paris had a dramatic jump in profitability during the first three months of this year, according to a monthly survey of 10 European cities.

The HotStats research, conducted by TRI Hospitality Consulting, revealed that chain hotels in the French capital enjoyed a 28.7 % hike in profits

Despite this rise, however, hotels in top placed Moscow were almost twice as profitable, delivering revenue per available room of €128.09 (£87.20) compared with third placed Paris at €65.52 (£44.60). 

Only hotels in London came close to matching the profitability of Moscow with a revpar of €105.03 (£71.50). 

Behind Moscow’s success is high revenue per available room – the third best in the survey – and in particular, very low wage costs. Payroll in Moscow is just 20.9% of sales compared to 40.7% in Paris.

“The best revpar performance will not always deliver the best profits,” said David Bailey, director of TRI Hospitality Consulting. “Hoteliers have to keep costs in check to extract the best operating return.” 

The Hungarian capital Budapest saw profit at its hotels almost halve during the first three months, year-on-year. 

The drop from €22.10 (£15.04) to €12.36 (£8.41) left the average chain hotel room in Budapest generating a tenth of the profit of the average room in Moscow. 

Hotel market set to slow, but no recession >>

Chain hotels enjoy a robust first quarter >>

Revpar for Moscow hotels continues to rise >>

View more trends and data here >> 

By Daniel Thomas

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