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London hotels see the first month of profit increase for 2013 in April

24 May 2013 by
London hotels see the first month of profit increase for 2013 in April

London hotels enjoyed gross operating profit (GOP) growth during April, after three consecutive months of profit decline, according to the latest HotStats UK Chain Hotel survey.

Properties in the capital experienced a profit increase of 1.6%, despite a slight decrease in occupancy by 0.2% at a stable average room rate (ARR) of £135.29, which resulted in a drop in revenue per available room (revpar) of 0.2%. Profit rose thanks to respective growth in revenues of 6.3% and 3.3% from beverages and food, compared to April 2012.

The residential conference segment also grew in volume by 2.3% and in rate by 2.9% to £158.96.

However, April's positive trend was not strong enough to offset what happened earlier in the year. The 4.9% decrease in total gross operating profit (goppar) for the first four months of the year was caused by a combination of both falling revenues and rising costs in areas such as property and maintenance.

Even though the first four months of the year show negative trends across all key performance indicators, the rolling 12 months figures are still recording benefit from the Olympic effect.

Meanwhile, the provinces experienced the biggest year-on-year profit increase in more than three years. Goppar climbed 10% last month, giving hoteliers reason to hope for a more profitable year ahead. This exceptional performance can partly be explained by the shift of the Easter holidays with Good Friday falling into March this year.

Revpar growth of 7.3% was aided by a combination of rising average room rate (2.2%) and increased occupancy (3.4 percentage points) in many cities.

Birmingham produced a positive performance in April with a 6.3% average rate increase and a rise in occupancy by 4.8 percentage points, resulting in revpar increasing up 14.4%.

An outstanding performance was also recorded in Bristol with goppar leaping by almost 55% last month thanks to above 20% revpar increases across all departments.

The calendar year, as well as the rolling twelve months picture of the provinces, are, however, not in line with April performance, with revenue increases not converted into profit growth despite efficient payroll control.

The UK Chain Hotels sample is composed of 624 hotels, operating primarily in the three and four star sectors, with an average hotel size of 177 bedrooms.

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