London chain hotels boosted their profitability by 18.8% during 2007, according to TRI Hospitality Consulting.

The capital’s hotels increased income before fixed charges per available room (also known as gross operating profit) to £64.04, up from £56.76 in 2006.

With occupancy static at 82.7%, the increase stemmed from a 10.2% increase in average room rate to £112.81 and a firm grip on payroll costs.

“The capital’s magnetism as a corporate and leisure destination and its extremely high occupancies meant there was minimal scope for hoteliers to increase volume in 2007,” said TRI managing director Jonathan Langston. “This puts a great emphasis on rate growth.”

Provincial hotels increased profitability by 2.2% to £33.02.

Aberdeen was the star performer of the year, with IBFC rising by 22% to £42.93 per available room. Demand from the oil and gas industries between Mondays and Thursdays has outstripped supply to the point that some hoteliers have been able to push room rates as high as £250.

Edinburgh also fared well during 2007 increasing IBFC by 8% to £42.76.

The chain hotels survey is compiled each year by Tri Hospitality Consulting.

UK HOTEL PERFORMANCE BY YEAR

 

UK total hotels	2004	2005	2006
Occupancy	73.1%	73.5%	75.5%
Room rate	£73.63	£77.34	£82.28
Revpar	£53.83	£56.86	£62.10
Payroll %	-	-	28.6%
IBFCpar	-	-	£41.03
London hotels	2004	2005	2006
Occupancy	78.8%	78.4%	82.7%
Room rate	£91.08	£94.50	£102.41
Revpar	£71.80	£74.08	£84.70
Payroll %	-	-	25.1%
IBFCpar	-	-	£56.76
Regional hotels	2004	2005	2006
Occupancy	70.5%	71%	71.5%
Room rate	£64.74	£67.71	£69.35
Revpar	£45.64	£48.10	£49.56
Payroll %	-	-	31%
IBFCpar	-	-	£32.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UK total hotels	2007	2008	2009
Occupancy	75.4 %
Room rate	£88.20
Revpar	£66.51
Payroll %	28.5%
IBFCpar	£44.14
London hotels	2007	2008	2009
Occupancy	82.7%
Room rate	£112.81
Revpar	£93.27
Payroll %	24.4%
IBFCpar	£64.04
Regional hotels	2007	2008	2009
Occupancy	71.3%
Room rate	£72.28
Revpar	£51.57
Payroll %	31.6%
IBFCpar	£33.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEFINITION OF TERMS

Occupancy 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.