Rooms Profit Continues to Fall for Hotels Across Europe

Seven trending hotel news stories that will impact your hotel Revenue Strategy.

1. Hotel Profit Down for Fifth Month in Europe

April 2019 saw the fifth consecutive month of profit decline at hotels in mainland Europe, as gross operating profit per available room (GOPPAR) fell 8.4% to €56.61.

Hotels in Europe saw a 1.2% decrease in revenue per available room (RevPAR) to €114.51 while ancillary revenues dropped 7.4% to €53.96. Total revenue per available room (TRevPAR) was down 3.4% to £168.47.

“After 25 months of almost consistent growth, profit per room at hotels in mainland Europe is now deteriorating as revenues slide and costs escalate. The pace of decline is worrisome with GOPPAR back at August 2018 levels,” said Michael Grove, Director of Hotel Intelligence, EMEA, HotStats.

Full story at HotStats.

2. Europe’s Hotel Construction Pipeline up 22%

The pipeline of hotels under construction across Europe continues to growth, with 1,670 projects totalling 254,600 rooms now under development or in planning - a 22% increase in projects and 19% increase in rooms year on year, according to Lodging Econometrics (LE).

There are a total of 844 projects currently under construction and 480 projects due to start construction in the next 12 months.

As such, LE forecasts that 390 new hotels will open in 2019 and a further 426 new hotels will open in 2020.

Germany leads the way with 319 projects, following the UK with 261 projects.

Full story at eHotelier.

3. Rising Asset Value Drives German Hotel Investment

Germany’s investable hotel market reached a record high of €57.5 billion in 2018, with an average price per room of €145,200, according to German investment firm Union Investment Real Estate GmbH.

According to Union Investment, 7% of hotel rooms changed hands in 2018, with new build activity and rising asset values driving growth. The market saw particularly strong performance in the upscale segment. Investment demand is expected to remain high due to tight supply.

Full story at Hotel News Now.

4. Profit Decline Across the Board for UK Hotels

Hotels in the UK reported a 10% year-on-year drop in GOPPAR to £43.22 in April – their largest profit decline since late 2016, according to HotStats.

All departments saw revenue declines, with RevPAR down 1% to £87.39 and TRevPAR down 2.6% to £131.97.

Full story at Hotel News Resource.

5. RevPAR Falls Continue for Middle East Hotels

Hotels in the Middle East saw further declines in RevPAR and average daily rate (ADR) in April 2019, following a slow Q1 2019. STR data showed a 3.3% decline in RevPAR to $110.62 and a 7.1% drop in ADR to $148.28 despite a 4.1% increase in occupancy.

Hotels in Dubai saw declines in both ADR and RevPAR: ADR in April 2019 was $134.22 in comparison to $150.29 for the same period last year. Meanwhile, RevPAR was down to $112.17 from $129.32 last year.

Full story at Hotelier Middle East.

6. UK Hoteliers Committed to Growing Direct Business

UK hoteliers remain committed to growing their strategy to drive direct bookings, according to a recent survey by Avvio and the Independent Hotel Show. The Direct Booking Survey 2019 showed that 69% of hotels were focused on growing direct business.

The research showed that, while nearly all the hoteliers surveyed used OTAs as part of their distribution model, most felt that the commissions charged had reached unacceptable highs.

Full story at Travel Daily News.

7. British Consumers Favour Short Breaks In 2019

The latest consumer report from Deloitte predicts that UK travellers will favour short breaks over longer holidays in Q2 2019. Net spending on short breaks is up by 4 percentage points compared to a year ago, while intended spending on longer holidays is up 1 percentage point.

The Deloitte Leisure Consumer Report showed that 10% of consumers spent more on long holidays in the first quarter of the year, while 39% said they would prefer to save for a holiday rather than spend money on other leisure activities.

Full story at Travel Weekly.

Stay up on hotel Revenue Strategy news and discuss industry tech trends in the Hotel Revenue Strategy Leaders Group on LinkedIn.

Sarah McCay Tams, Director of Content, EMEA

Sarah joined Duetto in 2015 as a contributing editor covering Europe, Middle East & Africa (EMEA). In 2017, she was promoted to Director of Content, EMEA. An experienced B2B travel industry journalist, Sarah spent 14 years working in the Middle East, most notably as senior editor – hospitality for ITP Publishing Group in Dubai, where she headed up the editorial teams on Hotelier Middle East, Caterer Middle East and Arabian Travel News. Sarah is now based back in the UK.

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