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Absence of biennial exhibition hits Frankfurt hotels in the pocket

03/05/2012

The absence of the biennial ISH Renewable Energies exhibition resulted in a 21 per cent year-on-year decline in profitability per available room for Frankfurt hotels in March.

According to the latest HotStats survey by TRI Hospitality Consulting, the impact of the event not taking place in 2012 led to a 9.7 per cent dip in total revenue per available room (TrevPAR) and saw gross profit per available room (GOPPAR) drop from €46.93 to €38.82. In 2011 the exhibition – which is scheduled to return in 2013 - attracted more than 200,000 visitors to the city.

“Although a 5.2 percentage point increase in payroll levels at hotels in Frankfurt, to 31.7 per cent of total revenue, is somewhat unsettling, it is not surprising as the cyclical nature of major events at Messe Frankfurt causes significant peaks and troughs in performance throughout the year,” said Jonathan Langston, managing director, TRI Hospitality Consulting.

Elsewhere in Europe, rising payroll costs impacted profit levels in Athens, Brussels, Istanbul, Moscow and Zurich during March.

Freefalling Athens suffered the worst drop in GOPPAR (160 per cent) to -€11.75, which was primarily as a result of a 13.1 per cent drop in achieved average room rate to €121.76 and an 11.3 percentage point increase in payroll, to 70.2 per cent of total revenue.

“This would suggest that labour costs in the Greek capital have not been modified to reflect declining demand levels,” said Langston.

Pictured: ISH Renewable Energies exhibition in Frankfurt


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