Strong January performance from regional hotels

By Carina Perkins contact

- Last updated on GMT

Related tags: Cent, Hotel

Hotels in all UK regions have enjoyed a positive start to the year, according to Hotstats' latest report
Hotels in all UK regions have enjoyed a positive start to the year, according to Hotstats' latest report
Hotels in every UK region enjoyed an ‘unusually positive’ start to the year, according to the latest HotStats report.

The UK Chain Hotels Market Review for January 2014 revealed that Yorkshire and Humberside hoteliers led the pack last month, with profits up by a quarter year-on-year.

Hotstats said a 7.1 per cent year-on-year increase in average room rates during January was “mainly underpinned by rate rises in residential conference and best available rate segments”.

Occupancy in the region hit 53.8 per cent, helping push RevPAR up by 9.6 per cent to £34.09. Increases in non-room revenue drove total revenue per available room (TRevPAR) up 6.9 per cent to £63.41.

Operating profit per available room (GOPPAR) was up by 25 per cent in January on the back of “well controlled operating costs and payroll”, combined with a reduction in overheads, the report said.

Hotstats pointed out this was particularly impressive given the 26% decline in revenue recorded amongst hotels in the region last January.


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Stratford-Upon-Avon hotels also had a flying start to the year, with positive year-on-year increases recorded across all key performance indicators except for room rates, which felll by 0.7 per cent to £66.34.

Occupancy growth of 3.5 per cent pushed RevPAR up 7.6 per cent and this, combined with ‘substantial improvement’ in ancillary revenues, helped drive a 12.3 per cent growth in TRevPAR to £60.88.

With operating profits pushed up by ‘efficient cost control’, GOPPAR amongst hotels in the region increased by a ‘staggering’ 30 per cent to £7.57, said the report.


Manchester costs rise

In Manchester, occupancy fell by one per cent, but a 3.5 per cent rise in average room rates to £72.17 contributed to a small 1.9 per cent uplift in room revenues.

This, combined with growth in food and beverage revenues helped boost TRevPAR for hotels in the region to £83.69.

However, HotStats said revenue gains were cancelled out by escalating operating costs, with payroll and overheads increasing alongside a 15 per cent surge in travel agent commissions.

As a result, GOPPAR fell 1.2 per cent in Manchester to £16.


Regional recovery

Regional hotels have staged an impressive bounce-back from the economic crisis, and have even outperformed London hotels​ at times, with eight out of 12 regions achieving growth​ last year.

Solid trading performance has improved investor confidence and drive an increase in regional hotel transactions. Experts report that regional properties are attracting significant interest from investors​, with some selling for well over the asking price.

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