Profits down at regional UK chain hotels
Profitability dropped at provincial UK chain hotels during August, according to new figures.
Daily income before fixed charges (IBFC) – also known as gross operating profit – dropped by 3.7% to an average annualised figure of £28.42 per available room compared to the same month a year earlier.
Lower profit was caused by a drop in demand and weak average rate growth of 0.5% to £69.55, resulting in total sales down by 2.4%, according to the latest HotStats survey from TRI Hospitality Consulting.
Liverpool bucked the downward trend with average occupancy rising by 7.2 percentage points to 73.1% due to Capital of Culture events.
Newcastle saw average occupancy edge up by one percentage point to 80.1% but the occupancy trend was negative in other major UK cities outside London.
TRI deputy managing director David Bailey said: “Even in August business demand remains crucial for branded chain hotels, which reported a significant year-on-year reduction in corporate and conference room lets.
“With British families taking fewer short breaks too, leisure demand was never going to compensate for the revenue shortfall.â€
London chain hotels saw moderate year-on-year growth with daily income up by 2.1 per cent to £49.69 driven by a 5.2% rise in achieved average room rate of £105.89, according to the study.
The average room rate in the capital in the eight months to August was up by 6.7% compared to 10.5% growth in 2007, 6.1% in 2006 and 3.8% in 2005.
Bailey said: “Changes in global financial markers are becoming increasingly volatile and dramatic. Given London’s maximum exposure to such events, hotel performance has remained remarkably steady over recent months. Although down on last year, average rate growth is still ahead of 2005 and 2006 levels.â€
by Phil Davies
Phil Davies
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