Average Room Rate drops by more than 10% across the region during 2009
The full extent of the challenges faced by North West hoteliers in 2009 has been revealed by the latest figures from HotStats, the UK’s foremost hotel performance benchmark database, by TRI Hospitality Consulting.
Average annual room rate at hotels across the North West region ended the year with an overall decline of 10.2%, to £66.64 from £74.22 during 2008. Hotels in Merseyside were particularly badly affected during 2009 with average annual room rate dropping by 12.2% compared to 2008 when the city thrived under its Capital of Culture status.
Despite a decline in average room rates, room occupancy for North West hoteliers held up reasonably well, down by 1.2 percentage points to 70.1%, from 71.3% in 2008. The single largest decline in room occupancy was again at hotels in Merseyside, where room occupancy dropped by an average of 5.5 percentage points. In contrast, Cumbrian hoteliers benefited from the increased number of ‘staycations’ and room occupancy levels increasing during 2009, by an average of 5.2 percentage points, to 62.3%.
Total revenue per available room (TrevPAR) was down by an average of 9.6% across North West hotels in 2009, to £96.44, with hotels in Greater Manchester experiencing a decline of 10.9% to £97.65. Again, Cumbria hoteliers bucked the trend, with a TrevPAR increase of 5.6% to £104.78.
The single largest cost for hotels, namely payroll, remained almost unchanged at hotels across the North West during 2009. As a region, payroll at hotels accounts for an average of 31% of total revenue, unchanged from 2008. Hoteliers in Lancashire however led the way in cost cutting measures, reducing payroll by an average of 1.5 percentage points to 32.5% of total hotel revenue. These small reductions in payroll cannot however hide how tough some hoteliers have found 2009 to be, evidence by a substantial decline in profitability in all hotels across the North West region, down by an average of 15.7%. Hotels in Manchester and Liverpool were particularly badly affected, down by 28.7% and 26.4% respectively as those hotels suffered as a direct result of a drop off in corporate-related accommodation demand and a further squeezing of corporate travel budgets.
Charles Scudamore, Director at TRI Hospitality Consulting to my-hospitality “No doubt 2009 was a tough year, particularly for hotels in secondary locations and those dependent on transient corporate and conference-related demand. In many ways, it has forced hoteliers to re-assess their business models and taught others some valuable lessons in how to maximise revenues and increase efficiency without compromising the guest experience. There are, however, many reasons to be positive for 2010. Early indications are that business levels are on the up and that 2010 will prove to be a much better year for those hoteliers which survived 2009.”