The latest report from Hotstats shows that UK hotels are continuing an upward revenue trend, but they face increasing costs.
The market achieved a 2.1 per cent increase in revpar to £94.20 in October. Hotstats attributes the increase to a 2.4 per cent boost in average room rate and says it comes despite a slight decline in occupancy to 81.1 per cent. Furthermore, room revenue was supported by a 1.1 per cent increase in food and beverage, a 4.9 per cent uptake in conference and banqueting, and a 2.4 per cent improvement in leisure.
However, marginal levels of revenue growth were outpaced by increasing costs, leading to a decline in profit conversion across a number of departments. Food and beverage dropped 1.2 percentage points to 34.8 per cent as a result of increases in cost of sales, as well as payroll, which was up 4.3 per cent.
It’s not all bad news, though, as Hotstats reports UK hotels achieved a 1.1 per cent increase in gross operating profit per available room to £58.77 in October. This is equal to a profit conversion of 40.4 per cent of total revenue, down only 0.3 percentage points from 2016.
Pablo Alonso, CEO of Hotstats, said: “Whilst 2017 is shaping up to be another positive year of revenue and profit performance for hotels in the UK, owners and operators will do well to monitor any further increases in food prices, and indeed other costs, which could challenge profitability levels in 2018.”