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European Chain Hotels Market Review released

The 5.9% drop in profit in the Rooms department at Amsterdam hotels this month was due to a 2.8% decline in Rooms Revenue, as well as rising costs, according to the latest data from HotStats.

The 5.9% drop in profit in the Rooms department at Amsterdam hotels this month was due to a 2.8% decline in Rooms Revenue, as well as rising costs, according to the latest data from HotStats.

Whilst hotels in Amsterdam were able to maintain room occupancy levels in November, at a lofty 80.9%, a 2.9% decline in achieved average room rate was directly responsible for RevPAR (Revenue per Available Room) dropping to €135.06.

The decline in RevPAR was in spite of the best efforts of Amsterdam hoteliers to drive demand via Online Travel Agents, evidenced by the 21.8% increase in Rooms Cost of Sales, to €7.31. However, the increase in this cost, as well as a 2.8% increase in Rooms Payroll, to €21.88 per available room, led to Rooms profit per room at Amsterdam hotels falling by 5.9% to €92.77 in November.

The performance of Amsterdam hotels this month reflects year-to-date trends. Despite RevPAR for the 11 months broadly remaining stable at €144.86, rising costs have resulted in Rooms profit conversion falling to 71.9% of Rooms revenue from 72.8% in 2015.

Commercial Demand Drives Strong Profit Growth for Prague Hotels

Hotels in Prague recorded a 32.5% increase in profit per room this month with top and bottom line performance being driven by demand from the commercial segment.

In addition to a 2.7% increase in achieved average room rate, to €91.12, RevPAR at hotels in the Czech capital was driven by a 7.3 percentage point increase in room occupancy, to 76.2%. This was not only due to in-house events at hotels polled, but also events at the Prague Conference Centre, which included the ECREA communication conference, which hosted more than 1,400 delegates.

The particularly strong month for the commercial sector was reflected by corporate and residential conference demand comprising more than 40.0% of total roomnights sold, compared to an average of 33.0% for year-to-date 2016; with strong rate growth achieved in both the corporate (+5.3%) and residential conference (+4.8%) segments.

In addition to the increase in RevPAR, year-on-year growth for the month was also recorded in ancillary departments, including Food and Beverage (+23.9%) and Conference and Banqueting (+46.5%), which fuelled a 16.0% increase in TRevPAR (Total Revenue per Available Room) to €123.03.

Despite increases in both Payroll (+4.6%) and Overheads (+1.4%) on a per available room basis, hotels in Prague achieved a 32.5% increase in profit per room this month, to €51.71.

Warsaw Hotels Set for Second Consecutive Year of Strong Profit Growth

A 15.4% increase in profit per room this month has helped secure a second consecutive year of strong profit growth for hotels in Warsaw following the 6.0% profit increase in 2015.

Although hotels in Warsaw have recorded a 0.9 percentage point decline in room occupancy for year-to-date 2016, this has been more than offset by the 11.1% increase in achieved average room rate, which has fuelled a 9.9% increase in RevPAR, to €76.13.

Whilst growth in the commercial segment has been strong, illustrated by a rate increase in both the corporate (+12.8%) and residential conference (+10.9%) segments, rate growth has been primarily through the individual leisure segment, which increased by 21.9% for year-to-date 2016, to €90.22.

Year-to-date 2016, the profit per room increase at hotels in the Polish capital has been recorded at 10.0%, to €50.42, equivalent to a 43.0% profit conversion, one of the highest of all the European cities polled. The growth is in spite of increasing costs, including Payroll (+3.1%) and Overheads (+3.9%) on a per available room basis.