DUBLIN Hotels shrugged off Ireland’s economic woes during February and recorded an astonishing growth in profits of more than 40%, according to the TRI Hospitality Consulting data.
Upmarket hotels in Dublin increased RevPAR by a third and total RevPAR by 16.4%. Driving these strong figures were a significant uplift in occupancy performance (9 percentage points) and strong average room rate growth (14.4%). The uplift in RevPAR performance resulted in gross operating profit per available room (GOPPAR) performance of €30.20, up 40.4% year over year.
“The continued increase in the Dublin market performance is remarkable, particularly when considering the negative headlines on the Irish economy and significant increase in hotel supply severely affecting hotel performance over the past two years,” says TRI Managing Director Jonathan Langston. “Whilst no one can say for certain that there will be a sustained improvement in hotel revenue and profit performance in 2011, a double-month growth will give hoteliers some hope for the future.”
RevPAR and TRevPAR performance increased in eight of the 10 cities surveyed TRI, but only five city markets achieved an increase in GOPPAR performance in February. Amsterdam, Budapest, Dublin, Düsseldorf and Zürich experienced double-digit GOPPAR growth.
Zürich was the star performer as hotels increased RevPAR, TRevPAR and GOPPAR performance by 25.3%, 32.3% and 86.5%, respectively. Occupancy performance increased by an astonishing 13.1 percentage points as Switzerland’s commercial hub experienced a strong pick-up in commercial demand in February.
While TRevPAR performance increased in London, Berlin and Paris, an increase in operating costs resulted in stagnant GOPPAR performance in London and a decline in Paris and Rome when compared to February 2010. TrevPAR dropped in Barcelona and Rome, by 4.6% and 2.5%, respectively, resulting in significant reduction in GOPPAR in those markets.
In the majority of the markets examined throughout Europe, a decline in non-rooms revenue performance had occurred in February, which reflects the current trend of a reduction in consumer confidence in Western Europe.
“Inflationary pressures in the European economy will have an effect on operating costs of hotels,” Langston says. “It appears that European city markets, which had implemented effective cost-cutting measures in 2009 and 2010, combined with a recovery in hotel performance over the same time period, are now experiencing more stabilized profit performance.”