Hoteliers in the East Midlands successfully recorded growth across all key market segments this month to fuel a 6.8% year-on-year increase in RevPAR (Revenue per Available Room), according to the latest data from HotStats.
In addition to growth of 1.1 percentage points in room occupancy, to 78.2%, the 5.2% increase in achieved average room rate was as a result of positive movement in the rate recorded in the corporate (+7.1%),residential conference (+7.3%), individual leisure (+5.0%) and group leisure (+11.1%) segments.
The year-on-year growth in RevPAR contributed to a 5.3% increase in TRevPAR (Total Revenue per Available Room), to £99.77 from £94.73 during the same period in 2014. The ongoing period of successful trading for East Midlands hoteliers was further illustrated by the 4.6% increase in Gross Operating Profit per Available Room (GOPPAR) to £32.22 from £30.80 in September 2014.
Top line growth continues at Stratford-upon-Avon Hotels, but beware bottom line
Hotels in Stratford-upon-Avon recorded another strong month of RevPAR growth in September, driven by year-on-year increases in both room occupancy (+3.8 percentage points) and achieved average room rate (+3.6%). The resulting 8.7% increase, to £64.60 from £59.44, contributed to RevPAR growth of 9.9% in the nine months to September 2015.
Whilst the Stratford-upon-Avon hotel market remains one of the top performers in the UK, due to its strong leisure and conference base, association with ‘The Bard’ and high barriers to entry, incremental increases in costs are beginning to impact the profitability of hotels in this market, illustrated by the 0.1% year-to-date decline in GOPPAR.
In addition to the 28.8% year-on-year increase in Rooms Cost of Sales (i.e. the cost associated with travel agents’ commissions, reservations fees, GDS fees, third party representation fees and internet booking fees) at hotels in Stratford-upon-Avon in the nine months to September 2015, growing labour costs (up by 1.2 percentage points to 33.2% of total revenue) are noteworthy.
A significant increase has also been noted in property and maintenance expenses (+17.6%) in the year to September 2015. Whilst this may be, in part, due to the age of a number of the properties in the sample, it may also be attributed to many of the properties in the sample being involved in major transactions in the last 12 months (i.e. The Hotel Collection’s Billesley Manor and Walton Hall & Hotel, Q Hotels Stratford Manor and The Stratford, as well as Principal Hayley’s Ettington Chase) and the costs associated with pre-sale ‘fluffing’ and post-sale product improvements.
Birmingham flying high on growth in commercial and leisure segments
Birmingham is currently one of the top performing hotel markets in the UK, in terms of GOPPAR, with a 23.3% year-to-date increase recorded in the nine months to September 2015, to £34.42 from £27.92 during the same period in 2014.
Despite the addition of more than 850 bedrooms into the market since 2013, Birmingham hotels have remained resilient, recording consistent growth in RevPAR, on a rolling 12-month average, from £48.07 in the 12 months to August 2014, to £54.85 in the 12 months to September 2015.
Whilst the Birmingham hotel pipeline for 2016 includes another 250 bedrooms from Holiday Inn Express and a 253-bedroom Park Regis from the Staywell Hospitality Group, a positive outlook for the local and national economy bodes well for Birmingham’s hotels where the commercial segment accounts for more than 50% of total hotel demand. In addition, strong visitor numbers to the city have contributed to a 5.6% increase in the achieved rate in the leisure segment in the nine months to September 2015.
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