Year-on-year profit per room fell 5.6 per cent for UK hotels this month as they faced the wettest March in a decade, along with unseasonal snow storms.
The latest Hotstats report for March shows the dip in profit was led by a 1.4 per cent drop in total revenue per available room to £126.69. Declines were recorded across all revenue departments, including rooms (down 1.2 per cent), food and beverage (down 2.4 per cent) and conference and banqueting (down 5.5 per cent).
Most likely as a result of the bad weather, there was a 0.6-percentage point drop in room occupancy to 75.2 per cent, further exacerbated by a 0.3 per cent decrease in achieved average room rate.
Costs continue to cause problems for UK hotels, including a 1.1 percentage point increase in payroll. Utility costs soared by 11.5 per cent year on year to almost 4 per cent of total revenue – another unwanted side effect of the snow storms.
However, some cities performed better than others in spite of the weather, with Birmingham reporting a 10.1 per cent increase in revpar and a drop in payroll costs. The city hosted the IAAF World Indoor Athletic Championships, as well as a number of large-scale exhibitions and trade shows.
Pablo Alonso, CEO of Hotstats, commented: “Spring failed to materialise in March and instead it was replaced with heavy snow fall and bone-chilling temperatures as the UK experienced its worst winter since 1991.
“This had the double-whammy effect of causing a drop in top-line performance as hazardous conditions meant the advice was not to travel, but also the bottom line was hit by high payroll costs, as it was way too late to adjust staffing levels, and the cold weather meant the heating had to stay on.”
hotstats.com