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2014 a prosperous year for UK hotel industry

The latest UK Chain Hotels Market Review from Hotstats indicates a prosperous year for the UK hotel industry, bolstered by strong December results.

Gross operating profit per available room (GOPPAR) showed growth for London and the UK provinces compared to 2013. This was particularly true of South West hoteliers, for whom GOPPAR increased by 9% in 2014, according to the latest data from Hotstats.

There was also a 7.9% uplift in rooms revenue per available room (RevPAR) for hotels in the South West last year, thanks to increases in average room rate (ARR) by 5.2% and in occupancy by 1.8 percentage points.

Positive results were recorded in non-rooms departments and total revenue per available room (TRevPAR) surged by 5.5% to £92.29. With efficient payroll management and costs controls, departmental operating profit per available room (DOPPAR) and GOPPAR went up by 5.9% and 9.0%.

For the month of December, South West hoteliers registered positive results across most key performance indicators with payroll being the only exception, thus TRevPAR and GOPPAR figures helped to enhance the overall performance.

Despite occupancy remaining virtually flat in 2014 at 79.3%, hoteliers in Edinburgh managed to drive RevPAR up by 5.3% thanks to increases in all segments’ rates with the largest year-on-year movements deriving from tours/groups (+7.8%) and corporate (+5.8%).

Similar performances were recorded in ancillary departments leading to a TRevPAR growth of 4.2%. Despite overheads per available room increasing by 3.5%, astute operating costs control and payroll management helped to convert revenue gains into profits with GOPPAR going up by 5.1%.

The month of December also fuelled the overall performance for Edinburgh hotels with RevPAR, TRevPAR and GOPPAR surging by 10.4%, 8.1% and 8.2% respectively.

Leeds hoteliers also registered strong December results to make the most of 2014 with surges for the year across all key performance indicators, notably with RevPAR and GOPPAR going up by 12.6% and 17.0% respectively, compared to the same period last year.

In 2014, a 9.9% increase of ARR and an uplift of 1.9 percentage points in occupancy delivered the RevPAR growth. But mixed performances were registered in other departments with revenue per available room declining from food (-0.4%) and beverage (-2.8%), while increasing from room hire (+12.0%), and as a result TRevPAR grew by 6.6%. With hoteliers controlling payroll levels as well as operating costs, GOPPAR increased by 17.0% representing a gross operating conversion of 30.7% (+2.7 percentage points).