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January blues for European hoteliers as profits dip

28/02/2012

European hotels have experienced a general decline in gross operating profit performance for the month of January according to the results of the latest HotStats survey.

Of the 10 cities surveyed, seven reported decline in profit margins, with Athens – plagued by ongoing socio-economic troubles and repeated rioting – being hit the hardest.

Revenue per Available Room (RevPAR) and Total Revenue per Available Room (TrevPAR) in the Greek capital fell by 15.3 per cent and 19.7 per cent respectively, with Gross Operating Profit Per Available Room (GOPPAR) declining by 119.3 per cent to minus €21.2.

Managing director of TRI Hospitality Consulting, Jonathan Langston, said: “The scale and impact of the riots coupled with proposed austerity measures is likely to continue to adversely impact hotel trading performance in the Greek capital for some time. From a market perspective, it is unlikely that we will see any pick-up in business or leisure-related tourism to Athens anytime soon, particularly in light of the recent news (in February) that many landmark historic buildings in Athens were vandalised and destroyed.”

Barcelona and Istanbul also registered a considerable downturn in GOPPAR performance for January at -36.6 per cent and -29.6 per cent, with TrevPAR for both cities deteriorating significantly to -4.1 per cent and -5.9 per cent – although RevPAR performance for Barcelona experienced only a marginal decline (-1.6 per cent) and Istanbul saw an increase of 3.7 per cent.

Despite showing positive RevPAR growth, GOPPAR performance for Paris (-3.6 per cent), Milan (-5.6 per cent), and Amsterdam (-1.8 per cent) also fell.

However, this trend among European cities was bucked by London and Moscow, with both cities reporting robust growth. Moscow witnessed RevPAR growth of 27.4 per cent, a 22.6 per cent increase in TrevPAR and GOPPAR profits up by 68.7 per cent.

London’s RevPAR was up by 8.2 per cent, and there was growth in its TrevPAR of +5.8 per cent and GOPPAR at +7.5 per cent; Zurich’s hotels also saw a rise in GOPPAR, up 2.3 per cent and the city registered the strongest occupancy performance of all cities surveyed at 73.3 per cent.

Pictured: Athens experienced a 119 per cent drop in GOPPAR during January


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