Rising costs cut into the profitability of UK hotels in June 2008, according to TRI Hospitality Consulting.
The downturn was most severe in the regions, where income before fixed charges per available room (IBFCpar) fell by 6.9%.
Profitability was also hit by slowing demand in the provinces, where occupancy dipped by 2.1 percentage points and average room rate increased by just 1.8% to create a 1% fall in revenue per available room (revpar).
“Ordinarily, we would expect most revenue gains to convert into profit. This is currently not happening,” said Jonathan Langston, managing director at TRI. “Given an increasingly competitive environment, rising costs cannot be passed onto the guest so are directly hitting the bottom line.”
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The increase in costs consumed one-third of new revenue generated by London hotels.
Despite a 1.5 percentage-point dip in occupancy to 85.5%, the capital’s hotels managed to hike average room rate by 5.7% to give a 3.9% increase in revpar.
However, IBFCpar rose by just 2%.
Langston said that, while there were signs that global food prices had peaked and should start to stabilise, hoteliers (especially in the provinces) faced an uphill struggle to regain profitability.
The chain hotels survey is compiled each month by Tri Hospitality Consulting.
Annual HotStats hotel performance data
TRI Hotels 2007 UK >>
TRI HotStats: annual UK hotel figures >>
TRI HotStats: Hotels 2007 Europe >>
| JUNE 2008 | UK TOTAL | 2008 | 2007 | Movement | | Occupancy | 78.4% | 80.3% | -1.9 points | | Room rate | £95.03 | £91.50 | +3.9% | | Revpar | £74.49 | £73.44 | 1.4% | | IBFCpar | £52.64 | £54.03 | -2.6% | | Payroll% | 26.4% | 25.9% | +0.5 points |
| LONDON | 2008 | 2007 | Movement | | Occupancy | 85.5% | 87% | -1.5 points | | Room rate | £126.49 | £119.70 | +5.7% | | Revpar | £108.17 | £104.11 | +3.9% | | IBFCpar | £76.95 | £75.46 | +2% | | Payroll% | 22.2% | 22.2% | 0 points |
| PROVINCES | 2008 | 2007 | Movement | | Occupancy | 74.6% | 76.7% | -2.1 points | | Room rate | £75.82 | £74.47 | +1.8% | | Revpar | £56.54 | £57.11 | -1% | | IBFCpar | £39.69 | £42.62 | -6.9% | | Payroll% | 29.6% | 28.6% | +1 point | |
| MAY 2008 | UK TOTAL | 2008 | 2007 | Movement | | Occupancy | 76.7% | 76.7% | 0 points | | Room rate | £89.73 | £87.68 | +2.3% | | Revpar | £68.84 | £67.27 | +2.3% | | IBFCpar | £46.27 | £46.99 | -1.5% | | Payroll% | 28.1% | 27% | +1.1 points |
| LONDON | 2008 | 2007 | Movement | | Occupancy | 82.9% | 81.6% | +1.4 points | | Room rate | £117.95 | £113.79 | +3.7% | | Revpar | £97.82 | £92.82 | +5.4% | | IBFCpar | £65.95 | £64.65 | +2% | | Payroll% | 24.7% | 23.2% | +1.5 points |
| PROVINCES | 2008 | 2007 | Movement | | Occupancy | 73.5% | 74.2% | -0.7 points | | Room rate | £73.38 | £73.03 | +0.5% | | Revpar | £53.95 | £54.21 | -0.5% | | IBFCpar | £36.16 | £37.96 | -4.7% | | Payroll% | 30.5% | 29.5% | +1 point | |
| APRIL 2008 | UK TOTAL | 2008 | 2007 | Movement | | Occupancy | 76.8% | 72% | +4.8 points | | Room rate | £90.39 | £84.53 | +6.9% | | Revpar | £69.42 | £60.88 | +14% | | IBFCpar | £44.74 | £35.45 | +26.2% | | Payroll% | 28.6% | 31.3% | -2.7 points |
| LONDON | 2008 | 2007 | Movement | | Occupancy | 83% | 78.8% | +4.2 points | | Room rate | £118.16 | £107.33 | +10.1% | | Revpar | £98.10 | £84.62 | +15.9% | | IBFCpar | £65.62 | £51.78 | +26.7% | | Payroll% | 24.9% | 27.3% | -2.4 points |
| PROVINCES | 2008 | 2007 | Movement | | Occupancy | 73.6% | 68.4% | +5.1 points | | Room rate | £74.05 | £70.76 | +4.6% | | Revpar | £54.47 | £48.43 | +12.5% | | IBFCpar | £33.86 | £26.90 | +25.9% | | Payroll% | 31.3% | 34% | -2.7points | |
| MARCH 2008 | UK TOTAL | 2008 | 2007 | Movement | | Occupancy | 72.3% | 74.5% | -2.2 points | | Room rate | £86.32 | £86.55 | -0.3% | | Revpar | £62.43 | £64.51 | -3.2% | | IBFCpar | £38.97 | £44.89 | -13.2% | | Payroll% | 30% | 28.2% | +1.7 points |
| LONDON | 2008 | 2007 | Movement | | Occupancy | 80.5% | 81.2% | -0.7 points | | Room rate | £109.71 | £108.88 | +0.8% | | Revpar | £88.27 | £88.36 | -0.1% | | IBFCpar | £57.69 | £62.21 | -7.3% | | Payroll% | 26.1% | 25% | +1.1 points |
| PROVINCES | 2008 | 2007 | Movement | | Occupancy | 68% | 71% | -3 points | | Room rate | £71.56 | £72.82 | -1.7% | | Revpar | £48.65 | £51.68 | -5.9% | | IBFCpar | £28.99 | £35.57 | -18.5% | | Payroll% | 32.8% | 30.5% | +2.3 points | |
| FEBRUARY2008 | UK TOTAL | 2008 | 2007 | Movement | | Occupancy | 72.1% | 72.1% | 0 points | | Room rate | £88.23 | £84.21 | +4.8% | | Revpar | £63.60 | £60.75 | +4.7% | | IBFCpar | £38.17 | £35.65 | +7.1% | | Payroll% | 30.5% | 30.7% | -0.2 points |
| LONDON | 2008 | 2007 | Movement | | Occupancy | 78.5% | 77.9% | +0.6 points | | Room rate | £114.54 | £107.05 | +7% | | Revpar | £89.89 | £83.34 | +7.9% | | IBFCpar | £57.74 | £51.68 | +11.7% | | Payroll% | 26.5% | 26.8% | -0.3 points |
| PROVINCES | 2008 | 2007 | Movement | | Occupancy | 68.8% | 69.2% | -0.4 points | | Room rate | £72.74 | £70.97 | +2.5% | | Revpar | £50.04 | £49.10 | +1.9% | | IBFCpar | £28.08 | £27.39 | +2.5% | | Payroll% | 33.4% | 33.3% | +0.1 points | |
| JANUARY 2008 | UK TOTAL | 2008 | 2007 | Movement | | Occupancy | 63.6% | 64.1% | -0.5 points | | Room rate | £87.19 | £83.32 | +4.6% | | Revpar | £55.46 | £53.40 | +3.9% | | IBFCpar | £28.97 | £28.35 | +2.2% | | Payroll% | 33.6% | 33.7% | -0.1 points |
| LONDON | 2008 | 2007 | Movement | | Occupancy | 72.6% | 72.6% | 0 points | | Room rate | £111.02 | £104.28 | +6.5% | | Revpar | £80.56 | £75.66 | +6.5% | | IBFCpar | £47.97 | £45.72 | +4.9% | | Payroll% | 28.4% | 28.9% | -0.4 points |
| PROVINCES | 2008 | 2007 | Movement | | Occupancy | 59% | 59.6% | -0.6 points | | Room rate | £72.04 | £69.84 | +3.1% | | Revpar | £42.50 | £41.63 | -0.1% | | IBFCpar | £19.14 | £19.16 | -1.4% | | Payroll% | 37.3% | 37.2% | +0.2 points | |
DECEMBER 2007
| UK TOTAL | 2007 | 2006 | Movement |
| Occupancy | 66.6% | 66.4% | +0.3 points |
| Room rate | £88.05 | £82.16 | +7.2% |
| Revpar | £58.68 | £54.53 | +7.6% |
| IBFCpar | £42.35 | £40.62 | +4.3% |
| Payroll% | 29.1% | 28.9% | +0.2 points |
| LONDON | 2007 | 2006 | Movement |
| Occupancy | 75.1% | 74.7% | +0.4 points |
| Room rate | £113.78 | £104.28 | +9.1% |
| Revpar | £85.45 | £77.93 | +9.6% |
| IBFCpar | £60.99 | £55.83 | +9.2 |
| Payroll% | 25.4% | 26.4% | -1 point |
| PROVINCES | 2007 | 2006 | Movement |
| Occupancy | 61.7% | 61.6% | +0.1 points |
| Room rate | £69.82 | £66.85 | +4.4% |
| Revpar | £43.09 | £41.19 | +4.6% |
| IBFCpar | £31.49 | £31.94 | -1.4% |
| Payroll% | 31.8% | 30.5% | +1.3 points |
NOVEMBER 2007
| UK TOTAL | 2007 | 2006 | Movement |
| Occupancy | 77.5 % | 78.2 % | -0.8 points |
| Room rate | £95.03 | £88.51 | +7.4% |
| Revpar | £73.61 | £69.23 | +6.3% |
| LONDON | 2007 | 2006 | Movement |
| Occupancy | 85.7 % | 86.2% | -0.5 points |
| Room rate | £125.85 | £115.60 | +8.9% |
| Revpar | £107.80 | £99.63 | +8.2% |
| PROVINCES | 2007 | 2006 | Movement |
| Occupancy | 72.9% | 73.9% | -1.1 points |
| Room rate | £74.82 | £71.60 | +4.5% |
| Revpar | £54.53 | £52.95 | +3% |
OCTOBER 2007
| UK TOTAL | 2007 | 2006 | Movement |
| Occupancy | 80.5 % | 78.9% | +1.6 points |
| Room rate | £93.31 | £85.91 | +8.6% |
| Revpar | £75.11 | £67.82 | +10.8% |
| LONDON | 2007 | 2006 | Movement |
| Occupancy | 87.3% | 83.7% | +3.6 points |
| Room rate | £122.42 | £110.08 | +11.2% |
| Revpar | £106.87 | £92.09 | 16% |
| PROVINCES | 2007 | 2006 | Movement |
| Occupancy | 76.7% | 76.3% | +0.4 points |
| Room rate | £75.10 | £71.15 | +5.5% |
| Revpar | £57.63 | £54.29 | +6.2% |
SEPTEMBER 2007
| UK TOTAL | 2007 | 2006 | Movement |
| Occupancy | 81.5% | 82% | -0.5 points |
| Room rate | £94.43 | £86.22 | +8.4% |
| Revpar | £76.17 | £70.72 | +7.7% |
| LONDON | 2007 | 2006 | Movement |
| Occupancy | 87.1% | 86.7% | +0.5 points |
| Room rate | £119.53 | £109.32 | +9.3% |
| Revpar | £104.16 | £94.73 | +10% |
| PROVINCES | 2007 | 2006 | Movement |
| Occupancy | 78.3% | 79.5% | -1.2 points |
| Room rate | £76.53 | £72.40 | +5.7% |
| Revpar | £59.90 | £57.55 | +4.1% |
AUGUST 2007
| UK TOTAL | 2007 | 2006 | Movement |
| Occupancy | 77.9% | 78.2% | -0.3 points |
| Room rate | £80 | £75.41 | +6.1% |
| Revpar | £62.30 | £58.97 | +5.7% |
| LONDON | 2007 | 2006 | Movement |
| Occupancy | 85.6% | 85.4% | +0.2 points |
| Room rate | £98.91 | £91.46 | +8.1% |
| Revpar | £84.67 | £78.15 | +8.3% |
| PROVINCES | 2007 | 2006 | Movement |
| Occupancy | 73.8% | 74.5% | -0.7 points |
| Room rate | £68.32 | £65.99 | +3.5% |
| Revpar | £50.40 | £49.15 | +2.5% |
JULY 2007
| UK TOTAL | 2007 | 2006 | Movement |
| Occupancy | 80.8% | 80.6% | +0.2 points |
| Room rate | £87.22 | £84.92 | +2.7% |
| Revpar | £70.48 | £68.48 | +2.9% |
| LONDON | 2007 | 2006 | Movement |
| Occupancy | 88.5% | 89.6% | -1.1 points |
| Room rate | £112.57 | £110.21 | +2.1% |
| Revpar | £99.59 | £98.70 | +0.9% |
| PROVINCES | 2007 | 2006 | Movement |
| Occupancy | 76.7% | 76% | +0.7 points |
| Room rate | £71.44 | £69.24 | +3.2% |
| Revpar | £54.78 | £52.60 | +4.2% |
Source: TRI Hospitality Consulting
The UK Chain Hotels sample is composed of up to 530 hotels with an average hotel size of 166 bedrooms. These hotels operate primarily in the three- and four-star sectors.
DEFINITION OF TERMS
is that proportion of the bedrooms available during the period which are occupied during the period.
Room rate is the total bedroom revenue for the period divided by the total bedrooms occupied during the period.
Revpar is the total bedroom revenue for the period divided by the total available rooms during the period
Payroll% is the payroll as a percentage of total revenue IBFCpar is the income before fixed charges divided by the total available rooms