LONDON Year-on-year profitability levels grew by more than 17% in October as occupancy once again exceeded 90%, according to data from TRI Hospitality Consulting.
This is the second month in succession and the fourth time this year that hotels in London’s 4- and 5-star sector have achieved occupancy in excess of 90%, and the UK capital once again achieved the highest room occupancy of all Europe markets polled during October.
Total revenue per available room (TRevPAR) levels also remained stalwart, at €246.15, representing an increase of 13% compared to the same period in 2009 and increasing slightly from September. The growth in TrevPAR is attributable to the growth in corporate and conference demand, which accounted for more than 50% of the market mix this month and which attracts a higher ancillary spend.
As a result of the movement in achieved revenue levels, gross operating profit per available room (GOPPAR) in London increased by 17.35 during October to €129.74, which is more than 28% above the year-to-date average of €101.14. Thanks to another month of strong trading, year-to-date profitability levels for London are approximately 43% above the second best performing Europe market in the sample, Amsterdam.
Despite the increase in revenue, profitability levels in London were hampered due to an uncharacteristic increase in payroll levels, to 22.8% from 21.9% of total revenue during the same period in 2009.
“In order to achieve such high room occupancy levels, a wealth of demand must be available across all market sectors,” says Jonathan Langston, managing director of TRI Hospitality Consulting. “For London hoteliers, the apparent recovery in the commercial market aligned with the remnants of a successful summer of leisure visitors, as well as several major annual events, has allowed for such a situation to occur.”