European Chain Hotels Market Review - March 2013
Bleak first quarter results were experienced in the majority of cities surveyed, with many cities experiencing poor trading performance results in March according to the latest HotStats survey by TRI Hospitality Consulting. In the first three months to March 2013 the biggest GOPPAR declines were experienced in Istanbul (-26.9%) and Vienna (-22.0%), whilst Amsterdam market GOPPAR performance remained flat. First quarter GOPPAR decline was also experienced in Brussels (-6.5%), Frankfurt (-0.7%), London (-7.2%), Paris (-3%) and Stockholm (-4.6%).
Budapest was one of the few European cities to buck the trend and register strong percentage profit growth for the month of March. As a result, the Hungarian capital was one of only two cities to achieve profit growth for the first quarter of 2013 of the ten cities surveyed, Budapest’s first quarter GOPPAR growth was due to stronger March performance, as RevPAR (Revenue per Available Room) increased by 6.1%, underpinned by an increase in demand levels as occupancy rose by 6.4 percentage points. Average room rate performance declined (-4.3%), reflecting the fact that Budapest hotels attracted a higher proportion of lower yielding leisure and group tour demand, relative to commercial-related demand, a sector where demand levels have declined and which typically commands higher rate.
According to the Federation of Hungarian Hotels & Restaurants, the expansion of low-cost carriers including Ryanair and Wizz Air has brought more sightseeing and leisure tourism to Budapest from a variety of destinations. In contrast, there has been a decline in the number of international-standard conferences according to the latest statistics released from the Hungarian Convention Bureau.
March TrevPAR (Total Revenue per Available Room) and GOPPAR (Gross Operating Profit per Available Room) performance in Budapest increased by 4.4% and 14.2%, respectively. Of the ten cities surveyed, the Hungarian capital, along with St Petersburg, was the only city market surveyed to achieve first quarter GOPPAR growth (+4.1%).
“Overall, first quarter market performance has not been robust in what is typically a challenging period for hoteliers. Whilst five out of the ten cities surveyed have experienced rooms and total revenue growth, only two city markets have improved profit performance, and that being from a relatively low base. This clearly highlights operating challenges facing hoteliers in Europe, not only from a top-line revenue perspective, but also managing costs,” said Jonathan Langston, managing director at TRI Hospitality Consulting.
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TRI Hospitality Consulting provides a wide range of services to clients in the hotel sector. It has offices in London, Dubai and Madrid.
For more information contact:
Jonathan Langston, managing director 020 7892 2201
David Bailey, deputy managing director 020 7892 2202
Charles Scudamore, director 0207 892 2211
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