Dramatic discounting across Europe’s hotels in 2009 did not save them from a woeful year’s business, according to the latest Hotstats survey from TRI Hospitality Consulting.
The likes of Prague and Vienna suffered badly as visitor numbers went into freefall. Prague saw a 35% drop in profitability over the year and Vienna saw the largest monthly decline in room rates for December – some 13%. Half the sample cities suffered a 30% decline in Gross Operating Profit per Available Room (GOPPAR).
London suffered the least, however. Its GOPPAR grew 23% in December which minimised its yearly decline in profitability to 3.4%, compared with 2008.
But the good news is that every city in the survey saw an improvement in volume in December 2009. Prague hoteliers experienced a growth in room occupancy levels for only the second time in 2009, by 2.6 percentage points, to 54.6%. The chink of sunlight for the city was boosted by a growth in profitability for the first time since January 2008, a result of a 6.5% cut in payroll which was reduced to 22.6% of total revenue.
TRI Hospitality Consulting managing director Jonathan Langston said: “Looking back to 12 months ago, it was easy to recommend the idealistic preservation of room rates to hotel managers. However, double-digit declines in volume in the third quarter of 2008 and into 2009 incited the inevitable reaction of dramatic discounting throughout Europe. The challenge for many cities in 2010 will be to repair the damage and try to rebuild.”
by Dinah Hatch
