STR Global Releases Preliminary Global Hotel Profitability Results
By Kerry Medina
June 27, 2012 9:53 PM
Now in its 14th year, STR Global’s Preliminary 2012 Global Profitability survey contains detailed data on hotel revenues and costs, showing the dynamic evolution of the sector by city, country and region.
“We are pleased to have increased this year’s participation level particularly in Latin America, China and across the Middle East,” said Elizabeth Randall, managing director of STR Global. “This edition will include new markets across emerging economies, which will provide strategic information for hoteliers, investors and developers seeking to understand changes in hotel profitability. Whilst our daily and monthly STAR reports provide market positioning information to operators, our profit-and-loss data helps both owners and operators during budget preparation at understanding gross operating profit (GOP) in relation to revenues and costs breakdown.”
Among the findings, in Buenos Aires, Argentina, the gross operating profit per occupied room (GOPPOR) ratio in U.S. dollars increased 3.9 percentage points year on year to 29.9 percent share of total revenue. The growth was led by increases in occupancy, average daily rate (ADR) and improvement in food and beverage profit, which saw total food and beverage revenue increasing by $15.91 per occupied room (POR) year on year. During the same period, total food and beverage cost increased by $6.73 POR.
In Europe, GOPPOR ratio in Warsaw and Berlin increased by 2.2 percentage points and 0.5 percentage points, respectively, compared to the previous year. The growth in Warsaw was led mainly by an increased ADR (up 2.1 percent), as well as declining rooms payroll and related expenses by 6.1 percent POR. In Berlin, GOPPOR growth was led in 2011 by increased total revenues (up 7.21 euros POR) year on year, benefiting from a relatively low increase in rooms payroll and related expenses (up 0.33 euros POR) and undistributed operating expenses (up 0.12 euros POR).
In China, Tianjin GOPPOR increased by 19.5 percent year on year in 2011 as RevPAR grew by 18.2 percent. Tianjin reported increasing rooms department profit (up 2.4 percent) while food and beverage profit declined by 8.8 percent. In Delhi, India, declining rate and occupancy in 2011 led the city RevPAR to decrease year on year by 14.2 percent to $114.53. As a result, room department profit POR declined by $22.08, leading GOPPOR to decrease by 16 percent.
In Egypt, Sharm el Sheikh saw total revenues POR declining to $118.69 (down 21.7 percent) in 2011 as the Arab Spring impacted the leisure destination. With declining revenues, the destination saw rising costs. Total room costs rose 13.8 percent POR, and total food and beverage costs increased 8.4 percent POR. As a result, GOP declined by $46.77 POR.
Over 2,400 hotels participated in the 2012 profitability survey from Santiago de Chile to Paris, from the Maldives to Wuhan in China. The data is reported on per available room (PAR), per occupied room (POR) basis and year-on-year percentage changes. The profitability reports, which include two years of data, are available for purchase (£900 per market or competitive set).