Return of business meetings spurs hotel profits in Amsterdam

AMSTERDAM Hotel profitability levels in Amsterdam were second only to London in October across Europe, as rooms revenue was boosted by the city’s exhibition center hosting a packed month of events, according to data from TRI Hospitality Consulting.

Amsterdam’s RevPAR grew by close to 50% as occupancy increased by 16.1 percentage points to 87.2% and ADR grew by 21.3% to €193.16. The growth in revenue can be attributed to the strength of demand associated with Sibos, a major financial services conference, which typically attracts approximately 8,000 international attendees, filling hotels to capacity on each of the five days of the event.

Following an investment of more than €100 million, Amsterdam has become increasingly competitive in the international conference and events sector and is set to host a number of major traveling conventions in coming years, with obvious positive effects for the city’s hoteliers. Demand for hotel accommodation in the Netherlands capital was also at a premium during the annual Horti Fair, which this year attracted a worldwide audience of more than 23,000 visitors.

In addition to the positive impact on revenue, Amsterdam hoteliers were well positioned to benefit from an increase in ancillary spend, resulting in a total RevPAR increase of 39.2% to €231.45. A 17.6% increase in food and beverage revenue per available room, to €43.60 was complemented by a 35% increase in meetings revenue, as local hoteliers accommodated a number of breakout meetings associated with Sibos.

The increase in revenue reflected positively on costs, illustrated by a 4.7 percentage point decrease in payroll as a percentage of total revenue to 25.6%.

“Trading conditions during 2009 and a large part of 2010 have been challenging for markets such as Amsterdam, which, having developed such a strong reputation as a destination for conferences and conventions, lost out due to the impact of the credit crunch,” says TRI Managing Director Jonathan Langston. “However, two years on and the market for meetings, events and conferences seems to be recovering, and the benefits for local hoteliers are clear.”