Whilst hotels in Europe recorded an eleventh consecutive month of profit growth, the year-on-year increase this month was more measured, at just 0.7%, to €50.04. This was equivalent to a profit conversion of 31.4% of total revenue.
Despite the much lower year-on-year increase in profit this month, at €37.37 per available room, GOPPAR levels for Q1 2018 were a hearty 6.8% above the same period in 2017.
In line with the decline in Non-Rooms Revenues at hotels across Europe, properties in Rome recorded a significant decrease in Food & Beverage (-16.2%) and Conference & Banqueting (-23.1%) revenue on a per available room basis.
This decline was further exacerbated by a considerable drop in Rooms Revenue at hotels in the Italian capital, which fell by 9.8% year-on-year, to €129.43.
Profit & Loss Key Performance Indicators – Rome (in EUR)
March 2018 v March 2017
RevPAR: -9.8% to €129.43
TrevPAR: -12.1% to €203.92
Payroll: +11.8 pts to 49.2%
GOPPAR: -37.5% to €27.80
Although hotels in Rome recorded a 2.8% year-on-year increase in achieved average room rate in March, to €210.52, it was entirely wiped out by an 8.6-percentage point decrease in room occupancy, to 61.5%, as the city’s hoteliers wrestle with falling volume across all market segments.
The decline this month continued the trend for Q1 2018, which has seen RevPAR at hotels in the Italian capital drop by 2.3% year-on-year due to a 5.8-percentage point decrease in room occupancy, to 54.5%.
As a result of the movement across all revenue departments, TrevPAR at hotels in Rome fell by 12.1% in March, to €203.92.
An 11.8-percentage point year-on-year increase in Payroll, to 49.2% of total revenue, heaped further pressure on to hoteliers in Rome and contributed to the 37.5% decline in GOPPAR in March, to €27.80. This is equivalent to a profit conversion of a lowly 13.6%.
“Whilst hotels in Rome have never been the most profitable in Europe due to high labour costs, this has been a particularly poor start to the year, with profit conversion recorded at just 6% of total revenue in Q1 2018.
And although the first three months of the year are traditionally the quietest for hotels in the Italian capital, all eyes will be on the performance next month, which could set alarm bells ringing for owner and operators if it is another month of decline in volume, particularly in the leisure segment,” said Pablo Alonso, CEO of HotStats.
Source : Company