recovery and into normalization.
By contrast, Western and Northern Europe are showing signs of strain. TRevPAR growth is limited to 2.2 % and 1.4 %, while GOPPAR growth slows to 2.2 % and just 0.2 %, respectively. Revenue momentum is weakening even as cost pressures, particularly labor, continue to rise.
This divergence reinforces a broader shift in performance measurement. RevPAR alone no longer captures the full revenue picture. As hotels seek growth beyond rooms, TRevPAR has become a more meaningful indicator of overall performance.
MARGINS HOLDING; NOT EXPANDING Looking beyond revenue, Europe’ s profitability story becomes more constrained. GOP margins in full-year 2025 stand at approximately 36.5 %, broadly in line with last year. While still healthy by historical standards, margin expansion has stalled.
Southern Europe continues to lead, with GOP margins approaching 41 % and remaining stable around 40 % since 2023, now slightly above pre-pandemic levels. Western Europe sits at the opposite end of the spectrum, posting the lowest GOP margin at 33.3 %, still below pre-pandemic performance.
Revenue growth alone is no longer delivering margin expansion. Profitability increasingly depends on how effectively operators convert revenue into profit.
PEAK PROFITABILITY? At an aggregate level, Europe may already have passed its profit peak. GOP margins rose steadily through the recovery and reached a high point in 2024. In 2025, margins remain strong at just under 37 %, but the trajectory has flattened.
This is happening despite continued topline growth. Both TRevPAR and GOPPAR
Past the Peak?
Revenue and Profit Trends – Full Years – EUR – Europe
72 % 72 %
21 %
2025
21 %
2024
59 % 59 %
Rooms |
F & B |
Departmental |
|
|
Margin |
37 % 37 %
GOP Margin
0.4 pts 0.1 pts 0.3 pts 0.1 pts
Spend goes beyond the room
Ancillary revenue – 2025 vs 2024 % Change – Europe
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Spa Treatments
Membership Fee
Health Club
4.7 %
6 %
5 %
Outlets
C & B Food
C & B Bev
are up by nearly 3 % year-on-year. However, flow-through is running at only 35 %, meaning incremental revenue is delivering significantly less incremental profit than in earlier years.
The next phase of performance will depend less on demand recovery and more on operational discipline.
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ANCILLARY REVENUE MOVES CENTER STAGE As room revenue growth moderates, ancillary income is becoming increasingly important. Wellness stands out, with spa treatments and membership fees up 4.7 % and 6 %, reaching approximately € 10 –€ 11 per occupied room.
Food-and-beverage performance is more mixed. Outlet and C & B food revenues show modest growth, while beverage revenues
0.9 %
1.6 %
0.4 %
EUR Per Available Room
250
200
150
100
50
0
188
68
remain under pressure, highlighting the need for targeted activation rather than broad-based pricing. Other revenue streams, such as parking and attrition fees, continue to rise.
Incremental profit today is less about selling more rooms and more about maximizing spend across the entire property.
RESHAPING THE P & L Labor has become the single largest pressure point on profitability. Total payroll per available room is up nearly 5 % yearon-year, driven by increases across Rooms, F & B operations and Sales & Marketing. Labor inflation is no longer cyclical— it is structural.
Pressure extends further down the P & L. Credit card commissions now average € 3
198
203
36 % 37 % 37 %
72 74
2023 2024 2025
Parking
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Cancellation Fees
Attrition Fees
3.5 %
4 %
32 %
60.0 %
50.0 %
40.0 %
30.0 %
20.0 %
10.0 %
0.0 %
Mar / Apr 2026 hotelsmag. com 75