Hotels in Istanbul enjoyed an almost 50% profit growth during the first six months of this year, according to European hotel market performance statistics from TRI Hospitality Consulting.
Chain hotels in the Turkish gateway city also showed a surge in sales with RevPAR up 26.7%. The gross operating profit per available room (GOPPAR) was up 49.2% for these same properties.
“Turkey is one of the fastest growing hotel markets in Europe and has been a focus for much development in the past few years. Despite this expanded supply hotels are continuing to perform strongly and Istanbul has easily the most profitable hotels in our survey,” said David Bailey, deputy managing director, TRI Hospitality Consulting.
The latest data from the survey showed that seven of the 10 European cities registered growth for the month of June. The European city markets of Amsterdam, London and Paris achieved marked growth as a combination of significant corporate demand, large events and robust leisure demand allowed all three markets to achieve significant profit growth.
“Amsterdam hotel market performance continues to go from strength-to-strength. Having tracked historic performance from our HotStats database, Amsterdam has registered continuous double-digit profit growth for each month over the past year,” Bailey said. “Since February 2010, average market-wide hotel profit performance in the Dutch capital, post-recession, has continued to increase and it is likely that this will continue in the next few months as GOPPAR performance approaches pre-recession performance levels.”
For the month of June occupancy performance in Amsterdam went up by 4.5 percentage points to 87.2%, and average room rate performance by 10.9% to €191.00. Overall, RevPAR increased by 16.8%.
London registered one of its strongest ever RevPAR performances for June, as the market continues to surpass previous peak pre-recession performance. The combination of strong leisure and corporate demand supported by significant events including the Wimbledon Tennis Championships, Hard Rock Calling, Taste of London and Royal Ascot all contributed to a significant increase in average room rate performance (+13%) and GOPPAR performance (+16.6%).
Paris also registered significant average room rate growth (+20.3%) as hoteliers continue to increase rates to the corporate and leisure market. For the month of June, average sector rates performance for the conference, corporate and leisure market sectors grew by at least 10%. Events such as the Paris Air Show and increased visitor levels from the Middle East and South America assisted in June’s robust performance.
“In June 2010, London and Paris achieved robust occupancy performance, as the pick-up in corporate demand and robust leisure demand underpinned RevPAR growth. This year, hoteliers in both markets are continuing to yield higher room rates as high and rising demand levels endure in two of the world’s most visited capital cities,” Bailey said.
Dublin also registered RevPAR and GOPPAR (+3.8% and +11.0%) gains as the market continues it slow yet steady path to continued profit growth post-recession.
Of the 10 hotel markets surveyed, Berlin, Budapest and Madrid experienced a reduction in GOPPAR performance, each market for varying reasons.
“In June 2010, a combination of major events and significant pick-up in corporate demand resulted in Berlin achieving strong RevPAR growth. The five per cent decline in RevPAR performance must be viewed in light of RevPAR growth of over 20 per cent the prior year. Berlin remains a solid market,” Bailey commented.
Whilst Budapest experienced RevPAR growth (+4.5%) for the month of June, RevPAR performance decreased by 0.5% to €120.77, resulting in GOPPAR decline of 6.9%.
“In broad terms, it appears that market demand for hotel accommodation in Europe’s major cities has increased reflecting an upturn in commercial and leisure demand over the past 12 months. That said, this growth is room occupancy and rate-led, as non-rooms revenue continues to decline. Such statistics suggest that whilst there is a strong propensity to travel, consumer budgets remain tight throughout Europe,” Bailey added.