EUROPEAN REPORT
lower change in average daily rate , but also challenges in operating costs , which the higher end hotels are more exposed to .
Another factor is the ongoing challenge around F & B profitability . Although the year-on-year change is minimal compared to 2019 , most of Europe has seen a significant fall in profit . Supplychain issues , driven by the rising cost of transportation and energy , combined with labor costs surging , have all contributed .
Revenue growth of 3.4 % per occupied room in the food and beverage outlets , combined with slow recovery of conferencing and events , has meant that costs have risen significantly faster and greater than guest spend .
Guests have increasingly more options outside of hotels , combined with the increased ability to be able to order to their room using food-delivery apps . Hotel F & B is at the forefront of topics in Europe as hoteliers
F & B Profit Margin – Full Year
11.6 % 10.5 %
16.5 %
2.4 % 4.0 %
8.8 %
18.3 % 20.6 %
24.8 %
12.8 %
2023
13.1 % 22.7 %
Austria |
France |
Portugal |
Netherlands |
Germany |
Belgium |
Switzerland |
United |
|
|
|
|
|
|
|
Kingdom |
Gross Operating Profit Margin – Full Year – Europe
51.4 % 56.0 % 55.0 %
Extended Stay
38.3 % 36.3 % 41.1 %
Select &
Limited Service
34.9 % 34.0 %
2023
37.7 %
2022
14.8 %
2022
26.3 % 14.1 %
26.8 %
19.8 %
2019
2019
26.7 % 11.9 %
13.5 % 24.0 %
23.8 %
23.8 % 14.5 % 29.4 %
Full Service |
Golf Resorts |
Spa / Wellness |
|
|
Resorts |
13.0 % 18.8 %
37.9 % 22.0 % 39.1 %
23.1 % 38.0 %
Beach Resorts
29.8 %
Michael Grove , COO , HotStats
34.3 % 35.1 % 30.0 %
32.9 % 32.5 % 32.5 %
36.5 % 36.4 % 39.2 %
36.1 % 33.5 % 37.7 %
34.5 % 33.7 % 33.7 %
33.7 % 33.7 % 33.7 %
Ultra Luxury Luxury Upper Upscale Upscale Upper MidScale Midscale
work to balance guest ’ s changing habits with trying to find a way to keep F & B profitable .
Hotels in France are barely profiting on average in F & B and Belgian hotels saw a fall of 11.9 percentage points since 2019 , a 3-percentagepoint impact on total hotel profit margin . The wider consideration for European hotels is how the various revenue centers complement ADR and the overall total revenue picture . Wellness ( spa and health club ) revenues , for instance , continue to thrive , replacing some of the loss of F & B profit and driving guest spend . Rooms department profit contribution is also holding strong at 72 % on average for Europe , the result of average rate growth achieved across the board .
Looking ahead , revenues are slowing , but there are positive signs that costs are , too , with many industry players predicting a pre-pandemic level of growth closer to the rate of inflation .
88 hotelsmag . com Mar / Apr 2024