Tag: REVpar

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London hotel rates up 2.6 per cent in November, finds HotStats

London hotels saw a 2.6 per cent increase in average room rate in November, according to the latest data from HotStats.

Rates increased year-on-year in the capital to £186.53 during the month, with occupancy down by 1.5 percentage points to 82.3 per cent.

Across the United Kingdom as a whole, occupancy was 78.5 per cent and average room rate was £123.43 in November.

A spokesperson for HotStats said: “Revenue growth hasn’t been an issue for UK hoteliers this year. It’s driving profit that has them frustrated.

“In a tale that is becoming all too common for the region, RevPAR (revenue per available room) at UK hotels was up in November, but profit against the same time last year was negative. RevPAR grew slightly 0.3 per cent year-on-year, while GOPPAR (gross operating profit per available room) was down 1.8 per cent year-on-year, illustrating the sometimes incongruous relationship between revenue and profit.”

The divergent revenue and profit picture across the UK in November was also seen in Birmingham, where both RevPAR and TRevPAR (total revenue per available room) were up year-on-year, 3.6 per cent and 1.1 per cent, respectively, against a resulting year-on-year decrease in GOPPAR of 1.5 per cent.

Occupancy in the city was higher than in London, at 83.6 per cent, with average room rate sitting at £94.27, almost half that of the capital.

In mainland Europe, hotels are generating revenue and keeping more of it. November marked the third consecutive month of year-over-year GOPPAR gains for hotels in the region.

GOPPAR was up 4.8 per cent in the month over the same time last year, but is still down 1.3 per cent year-to date, indicative of a previously listless profit performance, despite RevPAR that is up 1.2 per cent.

In November, RevPAR was up 4.2 per cent year-on-year, buoyed by a 1.9 per cent increase in average rate and a 1.6-percentage-point uptick in occupancy to 72.5 per cent.

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Record-breaking revpar increase for August in London hotels

Record-breaking revenue per available room rates for August were achieved by London hotels, according to preliminary figures released by data company STR.

Alongside a 4.5% year-on-year increase in revpar to £131.39, average daily rate also showed a healthy rise over the same month last year of 4.8% to £151.58.

While occupancy was marginally down by 0.3% to 86.7%, London climbed above 90% across 11 nights throughout the month. STR analysts said that this could be due to “the devaluation of the pound attracting international visitors to the capital”.

New room supply, up 1.5%, was slightly ahead of demand for accommodation, which increased by 1.2%.

STR will release is full August results later this month.

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Cricket World Cup boosts London hotel performance

The ICC Cricket World Cup has boosted hotels’ performance in London but failed to stop the regions sliding.

That is according to the UK Hotel Market Tracker: Q2 2019 produced by HVS London, AlixPartners and STR, which reports London recorded continued strong growth in the second quarter of the year as hoteliers pushed rates for visitors travelling to watch the cricket.

In contrast, regional revenue per available room (revpar) decreased for the second consecutive quarter, even with numerous matches being hosted outside of the capital. The report said the combination of top line retraction, cost pressures and unrelenting new supply is putting significant pressure on regional hotel margins.

With revenue declining, costs increasing and active pipeline remaining at 6% of current supply, operators may struggle to increase profitability, particularly in locations outside the main tourist hubs or without robust corporate activity.

Revpar in London increased by 6% in the second quarter, as hoteliers benefited from sporting events including the Cricket World Cup and Major League Baseball at the London Stadium.

Active pipeline (10% of current supply) will be monitored by operators in the capital given relatively flat occupancy, but a revpar increase of over 6% over the last 12 months demonstrates how robust demand remains.

Across the UK, only £360m of transactions were completed in Q2 2019 – some £144m in London and £210m in the regions – with transaction flow continuing to be impacted by Brexit uncertainty, which is seeing deals either being put on hold or taking longer to complete.

£2.1b of transactions were completed in London in the 12 months to Q2 2019, an increase of 54% on the previous year. This figure was boosted by the sale of the Grange portfolio in Q1 (£1b) and the 163-bedroom Crowne Plaza Kensington in Q2 to a Singaporean consortium led by Heeton Holdings (£84m, or £513,000 per bedroom).

Yields in London and the regions remain tight in comparison to historical averages, although there was little evidence of further compression in Q2 2019, except in isolated cases in London.

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London hotels achieve record revpar figures for March

Preliminary March data shows demand outpaced supply among hotels in London, leading to a 2.1% occupancy increase.

Based on daily data from the month, London reported the following in year-over-year comparisons:

• Supply: +2.5%
• Demand: +4.6%
• Occupancy: +2.1% to 81.6%
• Average daily rate (ADR): +1.7% to GBP138.13
• Revenue per available room (RevPAR): +3.8% to GBP112.68

The absolute RevPAR level is the highest for any March in STR’s London Database. STR analysts attribute the performance to several events in the market—a pair of Six Nations rugby matches (9 March and 16 March) and the Passenger Terminal EXPO (26-28 March).

Keeping checking back for the full March results that will be released by STR later this month.

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European hotel rooms see ‘strong growth’ in value

European Landmarks

Hotel values across Europe registered another strong year in 2018 showing 3% growth and reaching new highs, according to the annual European Hotel Valuation Index (HVI), compiled by global hotel consultancy HVS.

Although it was a more modest growth than that of 2017 at 3.9%, 2018 saw recovery for many cities as well as a levelling off in values for some markets, which had previously been depressed compared with the European average.

The annual HVI ranks the percentage change in the values of typically four-star and five-star hotels across 33 major European cities, both in Euro and local currency terms, as well as ranking each market in terms of the average price per hotel room.

Hotels in Lisbon, Moscow, Paris, Brussels and Berlin filled the top five slots in terms of highest percentage growth in values in euro terms, with Lisbon (9%), the year’s biggest climber.

On the back of the FIFA World Cup Moscow’s hotels recorded 8% growth in this year’s index with a RevPAR increase in euros of over 180% for June and July. St Petersburg showed a 6% increase, ranking it sixth in the HVI. In local currency value growth in these markets was even more pronounced.

Paris returned to the top five in this year’s index up 7%, while Berlin completed the top five also with 7% growth.

Only six of the 33 markets analysed experienced a value drop, with those at the bottom of the index, in euro terms, including Barcelona, which was badly impacted by the civil unrest caused by the strengthening of the Catalan independence movement; Hamburg, Manchester and Warsaw, which all suffered from an influx of new supply in the market; and Geneva and Stockholm, which were impacted by currency dynamics in 2018.

In terms of the absolute value of hotel rooms, those in Paris, London, Zurich, Geneva and Rome filled the top five slots for the most expensive in Europe, with Birmingham, Sofia, Bratislava, Bucharest and Manchester at the bottom end of the ranking.

Sophie Perret, director at HVS London, said: “Demand for hotel accommodation remains vigorous across most markets in Europe, and while economic growth for this cycle might be beyond its peak hotel demand is unlikely to suddenly fall away.

“For investors the advice is to factor in a slightly longer exit window and be cautious, but there are some good deals to be had by those seeking to acquire hotels in many European cities.”