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| Hospitality Today | Winter 2020
The hospitality market
– figures & forecasts
London’s robust performance is due
to increased demand for leisure, with
occupancy levels one of the highest in
Europe at 81.4%, whilst the regional
cities saw average occupancy of 77%. The
report revealed an increasing polarisation
between secondary cities and the top 15
cities, with the latter achieving an average
occupancy of 81%.
UK wide profitability has been impacted by
operational costs which are currently rising
at a faster rate than revenues, with staff
costs having increased by 5.1% in London
and 6.3% in the top 15 regional cities due
to the rise in the National Living Wage over
the past 12 months.
The trading performance of UK hotels held
up well in 2019, particularly in London
which saw RevPAR levels grow by 5.8%
and GOPPAR by 4.7% (for the 12-months
to September 2019) whilst the top regional
cities saw REVPAR grow by 3.7%. This was
despite “challenging market conditions
including accelerating costs and a
decrease in profit margins”, according to
the annual UK Hotel Trading Performance
Review 2019 by Knight Frank and HotStats.
The report identified the top 15 performing
regional cities with the top five being
Edinburgh, Oxford, Brighton, Cambridge
and Manchester, which have been
strengthened by the domestic staycation
market and the trend towards millennials
prioritising spending on experiences rather
than consumer goods.
RevPAR at UK hotels was up in November,
but profit against the same time last year
was negative, according to HotStats. RevPAR
grew slightly 0.3% year on year (YOY), while
GOPPAR was down 1.8%.
Yearly numbers show the trend: RevPAR
is up 1.9% for 2019, while GOPPAR is down
0.9%. Moreover, while 2019 has seen
eight months of YOY revenue (TRevPAR)
increases, it’s also seen eight months of
YOY profit (GOPPAR) falls.
For year-to-date (end November figures),
hotels in London have recorded a 2.6%
increase in TRevPAR and a 1.0% increase
in GOPPAR, signs of a still strong though
slowing market. Profit margin for
November 2019 was recorded at 44.7%, a
1.0% point drop from 2018.