MARKET ANALYSIS > Yorkshire & Humberside
MARKET ANALYSIS : YORKSHIRE & HUMBERSIDE
COMMENT
Alan Frost , senior manager , Hospitality and Leisure
16
Through covering large cities such as Leeds , Bradford , Sheffield and York , amongst other leading urban areas , the Yorkshire region is a commanding space for the UK hospitality market with over 36,000 hotel rooms . The region has bucked the trend of other UK regions in the last twelve months by posting significant increases to both occupancy ( up 2.5 % to 77.2 %) and ARR ( up 4.4 % to £ 73 ), with a resulting 7 % increase in RevPAR .
An element of this growth can be attributed to a stable supply of hotels in the area and the quantity of hotels refurbished in the prior year . There were a large number of both new hotels which opened during 2015 and had a full refurbishment , but only a handful of these during 2016 . The full year impact of these new openings and refurbishments were therefore seen during 2016 .
Despite an astonishing 7 % growth in RevPAR , the rooms department saw a reduction from 67.5 % to 67 % in their profitability , and only a small proportion of the increased
cost to service each room was surprisingly a consequence to additional labour costs .
In terms of overhead costs , there has been an increase in both admin and general costs ( up 2.3 %), and sales and marketing expenses ( up 9.4 %) - the latter linked directly to impressive RevPAR growth , whilst property and maintenance costs have fallen ( down 1.7 %) following a large number of refurbished properties in the prior year .
The overall impact is an 8.2 % increase in GOPPAR from £ 29.02 to £ 31.41 - and is ultimately the reason for attracting investment and a further 8,500 bedrooms in the pipeline for the region ; which would increase the supply of rooms in the region by over 20 %.
Interestingly there are a large number of luxury hotels in the pipeline ; historically the region has had a comparatively low number of five-star hotels compared with the wider UK market . This demonstrates the appeal of the region to visitors and the strength of the hotel market generally in Yorkshire .
Statistics courtesy of Hotstats
MARCH 2016 TO FEBRUARY 2017 |
|
|
This Year |
Previous 12 Months |
“ YOY Volume Change ” |
|
|
Rooms Department |
|
|
Occupancy |
% |
77.2 % |
75.3 % |
2.5 % |
Average Room Rate |
£ |
73.00 |
69.92 |
4.4 % |
Rooms Rev . PAR |
£ |
56.38 |
52.68 |
7.0 % |
Rooms Labour Costs % Rooms Rev . |
% |
15.9 % |
15.8 % |
0.6 % |
Rooms Dept . Profit % Rooms Rev . |
% |
67.0 % |
67.5 % |
-0.7% |
|
|
Food and Beverage |
|
|
A & G Total Costs PAR |
£ |
10.13 |
9.90 |
2.3 % |
S & M Total Costs PAR |
£ |
5.82 |
5.32 |
9.4 % |
P & M Total Costs PAR |
£ |
3.57 |
3.63 |
-1.7% |
|
|
Total Operation |
|
|
Total Rev . PAR |
£ |
100.07 |
95.2 |
5.1 % |
Total Hotel Labour Costs % Total Rev . |
% |
30.4 % |
30.4 % |
0.0 % |
Total GOP PAR |
£ |
31.41 |
29.02 |
8.2 % |
www . hotelowner . co . uk April 2017