During the first three months of 2017, the hotel industry in London, England, posted its highest revenue per available room (RevPAR) for any first quarter on record, according to data from STR. The market's absolute RevPAR level of GBP101.50 was an 11.3 per cent increase compared with Q1 2016.
Concluding with strong growth in March, the European hotel industry reported increases in each of the three key performance metrics during the first quarter of 2017, according to the latest data from STR. Compared to the first quarter 2016, occupancy in Europe increased by 4.1 per cent to 63.5 per cent.
How has the hotel industry been faring in terms of revenue and profit management in recent years and what should hoteliers be doing to tackle the challenges they’re facing, either from online travel agencies (OTAs) or rising wage and insurance costs?
For hoteliers, planning the right resources to satisfy guest demand is a fine art at any time of year—especially when unpredictable events and seasonal demands create dramatic shifts in inquiries and bookings. It is a balancing act aimed at capturing as many sales as possible while avoiding a resource drain and high costs associated with additional staffing.
Most hoteliers view revenue management as a strategic imperative, given the opportunity to improve the financial performance. That said, it is important to note that revenue management can take many different forms, some of which are far more sophisticated — and effective — than others.
In the negotiation of management agreements, owners take comfort from the performance test that in the most optimistic light will allow the hotel owner to terminate a management company that does not meet the standards of the performance test. But let’s look more deeply into the proposition that the performance protects the owner from the under-achieving management company.
To maximise the revenue performance during a fair or high impact event might be easier said than done. Many rely on returning business to bring in a safe level of base occupancy to a slightly higher rate and surely their ADR and RevPAR will increase accordingly a couple of euro. But is that enough?
The tide may be finally beginning to turn for Manhattan hotel investors, thanks to a dip in the supply pipeline. Hersha Hospitality Trust, an owner of 12 New York City hotels, posted 1.2 percent growth in RevPAR.
Choice Hotels International, Inc. has reported its results for the three months and year ended 2016, and recorded a record increase in share price late in the year.
Many hotels are still using outdated revenue management techniques and should get on board with the airlines’ yield management practices to get their occupancy and RevPAR rates to take off.