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April 2018: TrevPAR Hits a High at Hotels in the U.S.

Total revenue levels at hotels in the U.S. hit a high of almost $290 per available room in April, as strong year-on-year revenue increases were recorded across all operating departments, according to the latest worldwide poll of full-service hotels from HotStats.

The TrevPAR measure encompasses the revenue generated across all operating departments at hotels in the U.S., which this month was led by a 5.6 percent year-on-year increase in revenue in the rooms department, as well as growth in non-rooms revenues, including food/beverage (+8.4 percent) and conference/banqueting (+11.6 percent) on a per available room basis.

The growth across all revenue centers fueled a 6.5 percent year-on-year increase in TrevPAR, which hit a post-GFC high of $287.53 per available room in April and meant revenue levels edged past the $285.87 achieved in this measure last month.

While growth in RevPAR included a 0.2 percentage point year-on-year increase in room occupancy to a robust 82 percent, it was led by the 4.6 percent increase in achieved average room rate, which was recorded at $218.78 this month, just short of the peak in this measure in March.

In addition to the growth in revenue, hotels in the U.S. were further buoyed by an increasingly uncommon decline in labor costs, which fell by 0.4 percentage points to 32.1 percent of total revenue. 

Profit & Loss Key Performance Indicators – U.S. (in USD)

April 2018 v April 2017

RevPAR: +5.6% to $179.32

TrevPAR: +6.5% to $287.53

Payroll: 0.4 pts to 32.1%

GOPPAR: +9.1% to $120.02

Flow Through +56.8%

As a result of the movement in revenue and costs, profit per room at hotels in the U.S. grew by 9.1 percent year-on-year in April, to $120.02, which was only just behind the previous high of $121.56 recorded in October 2017.

Additionally, the cost savings enabled hotels in the U.S. to record a profit flow through of 56.8 percent this month, highlighting the ability of hoteliers to drive profit levels during periods of positive performance.

The profit per room increase this month helped to shore up the year-to-date growth in bottom line performance at hotels in the U.S., which was recorded at +3.9 percent for the four months to April 2018, to $102.39.

“April marked another month of positive trading for hotels in the U.S. It’s very pleasing to see the high levels of conversion being achieved at a very punchy 41.7 percent of total revenue this month

Particularly notable is the healthy level of flow through where the less profitable non-rooms generating departments led the revenue growth,” said Pablo Alonso, CEO of HotStats.  

For hotels in San Francisco, the buoyant performance in April provided some respite from a fairly mixed period of trading since the beginning of the year.

Hotels in San Francisco posted an 18.9 percent year-on-year increase in TrevPAR in April, to $348.84, which was fueled by the week-long RSA security conference, which took place at the Moscone Center and helped boost demand for hotel accommodation across the city.

The annual conference welcomed more than 42,000 attendees in 2018, with 550-expert-led sessions and more than 650 exhibitors.

As a result, while occupancy levels broadly remained stable at 88.4 percent, hotels in San Francisco were able to leverage price to record a 16.3 percent year-on-year increase in achieved average room rate to $283.34, which fueled the 16.1 percent increase in RevPAR to $250.50.

The rate growth was led by a 27.0 percent year-on-year increase in the best available rate category, which soared by almost $70 to $314.29 and was by far the highest sector rate recorded at hotels in the city this month. Additionally, increases were also recorded in rate in the conference (+5.7 percent), corporate (+7.8 percent) and leisure (+22.5 percent) segments.

While it was a strong month of trading, hotels in San Francisco may have left some cash on the table as the data suggests that a significant proportion of roomnights were booked through third party intermediaries. This was evidenced by the 35.3 percent year-on-year increase in rooms cost of sales (i.e., HotStats’ measure of travel agents’ commissions, reservation fees, GDS fees, third-party fees and Internet booking fees), to $13.52 per available room, equivalent to 5.4 percent of rooms revenue.

Aside from this, it was a positive month for hotels in San Francisco as the weight of attendees to the RSA conference also fueled the appetite for ancillary facilities, which meant growth was successfully recorded in non-rooms revenues, including food & beverage (+29.9 percent) and conference/banqueting (+36.5 percent) on a per available room basis.

Profit & Loss Key Performance Indicators – San Francisco (in USD)

April 2018 v April 2017

RevPAR: +16.1% to $250.50

TrevPAR: +18.9% to $348.84

Payroll: -3.7 pts to 39.1%

GOPPAR: +35.0% to $133.55

Flow Through: 62.6%

Furthermore, the weight of revenue growth enabled hotels in San Francisco to record a saving in labor costs, which fell by 3.7 percentage points to 39.1 percent of total revenue and contributed to the 35.0 percent year-on-year increase in profit per room in April to $133.55. 

Further down the Pacific coastline, while hotels in San Diego also recorded a positive month of trading, it was well behind the year-on-year growth in San Francisco.

The 3.1 percent increase in TrevPAR, to $309.29, continued the mixed performance in San Diego since the beginning of 2018.

“Despite a 1 percent increase in profit per room for the month, to $143.78, flow through was recorded at just 16.1 percent, way below the industry average expectation of 50% flow, which continues to highlight the challenges operators are facing with tightening profit margins in a period of increasing operating costs,” added Pablo.

Profit & Loss Key Performance Indicators – San Diego (in USD)

April 2018 v April 2017

RevPAR: +2.6% to $197.82

TrevPAR: +3.1% to $309.29

Payroll: +1.5 pts to 28.5%

GOPPAR: +1.0% to $143.78

Flow Through: 16.1%

 
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May 8, 2018

Relais de Chambord – Chambord, France

55 rooms from USD 197 per night including breakfast

www.slh.com/chambord

Opened March 16, 2018

Offering breath-taking views of the awe-inspiring Château de Chambord, the newly opened Relais de Chambord combines heritage and wellbeing within a notable historic setting. Surrounded by private gardens designed by Christian Fournet, the country hotel brings together natural elements and warm atmosphere less than two hours from Paris. The house offers six categories of rooms overlooking the Château, Le Cosson River, Place Saint Louis or the forest of Domaine National and are adorned with lush velvet, wood and ceramics. Enjoy the grounds with a walk to the château, take a boat ride on the river or relax in the private spa.

SLH Insider Tip: Take a seat in Le Grand Saint Michel restaurant (or on the terrace in warmer weather) to savor classic French cuisine. Then retire to the library, with a snooker table and classic board games to enjoy.

The Sukhothai Shanghai – Shanghai, China

201 rooms from USD 330 including daily breakfast, in-room refreshments a credit of USD 47 on food & beverage consumption and WIFI access

www.slh.com/sukhothai

Opened April 28, 2018

Situated in the heart of vibrant Shanghai, this contemporary luxury hotel was designed by internationally-acclaimed Neri & Hu Design and Research Office. With some of the largest rooms and suites in the city, the floor-to-ceiling windows offer sweeping views of the bustling landscape while natural furnishings create a sense of calm and warmth. La Scala restaurant, led by Michelin-starred guest chef Theodor Falser, serves fresh-to-order contemporary Italian cuisine from an open theatre kitchen. For a moment of relaxation, The Spa Retreat provides Southeast Asian healing therapies and signature wellness programs, along with a Fitness Studio, 25-metre heated indoor pool, sauna and steam room. Seamlessly connected to the HKRI retail mall, the neighborhood is also easy to explore on foot or by bamboo bicycles provided on property with People’s Square, Grand Theatre and Shanghai Natural Museum all nearby.

SLH Insider Tip: Head up to the URBAN Café & Lounge for a tipple where guests can create personalized gin cocktails. Call over the trolley to select herbs and locally sourced spices to blend with any one of the 300 types of gin available.

Canaves Oia Epitome – Santorini, Greece

24 villas from USD 596 per night including breakfast

www.slh.com/epitome

Opening May 15, 2018

This boutique hotel has carved out a peaceful spot just outside the main town, giving it the feel of a secret piece of paradise. Each private villa offers Classic Cycladic design and is perfectly positioned for soaking up the best sunset views on the island. Spend the day relaxing by your private terrace and pool, then savor an evening by the private fire pit. Muted natural tones and a minimalist design add to the sense of peace, which is complemented by activities including daily yoga classes. Yet with a hotel shuttle, the buzz of Oia is never far away – and popular Katharos Beach is within walking distance.

SLH Insider Tip: Book an Aqua Retreat Villa for its unique see-through glass wall pool view from the lower level bedroom.

akyra Sukhumvit Bangkok – Bangkok, Thailand

46 rooms from USD 132 per night including breakfast

www.slh.com/akyrasukhumvit

Opening May 12, 2018

An innovative new hotel with serious style credentials, the hotel offers guests re-imagined urban accommodation in the heart of Bangkok. The hotel is ideally located on Sukhumvit Soi 20, an area of Bangkok known for its buzzing atmosphere, high-end retail, green spaces and fine dining. With understated interiors and personalized service, this boutique retreat beckons visitors to discover a cosmopolitan city lifestyle. With natural wooden floors, crisp white linens and neutral color schemes, the 46 rooms and suites are refreshing and relaxing in equal measure. Floor-to-ceiling glass doors open onto spacious balconies in most rooms, seamlessly merging indoors with outdoors. Unwind with a long soak in the bath before a night out. Or plan an evening in, and have dinner served in your room. 

SLH Insider Tip: This property is set to become the first new hotel in Asia to launch without single-use plastic in its rooms or food and beverage outlets. The hotel will extend the eco-friendly initiative for guests on the go with stylish akyra stainless steel water bottles and reusable shopping bags presented on arrival.

Fendi Private Suites – Rome, Italy

7 rooms from USD 596 per night including breakfast

www.slh.com/fendi

Dominating the buzzing Via dei Condotti, this sumptuous palazzo originally belonged to a noble family and has been the prestigious headquarters of Fendi since 2005 - and the world’s very first Fendi hotel. Comprised of just seven impeccably designed suites, the hotel epitomizes the ultimate in elegance. With exclusive access and immersion into the Fendi world, it redefines luxury for sophisticated travelers who are looking for privacy as well as a unique experience in the heart of Rome. The bedrooms at Fendi are exclusive galleries to luxury style, with every element carefully chosen to create a sleek, peaceful space in which to unwind. Relax on furniture sourced from classic designers such as Hans J Wegner and FENDI Casa. Take in the views of city life outside or of local landmarks in photographs taken by Karl Lagerfeld. With so many beautiful things to enjoy, these rooms were made to inspire.

SLH Insider Tip: After a day of shopping, return to Fendi Private Suites and join fellow fashionistas for cocktails at Zuma Lounge, followed by contemporary Japanese cuisine at Zuma restaurant located on the rooftop.

And in other news...

Hotel Infante Sagres: the most historic luxury hotel in the city of Porto reopens

www.slh.com/infantesagres

After five months of intensive restoration and renovation, the Infante Sagres, which was Portugal’s first ever five-star hotel, has reopened with 75 luxurious rooms, 10 suites and a new Vogue Café. During the refurbishment, specialist teams of restorers were brought in to work on the iconic original features such as the 5-story stained glass window and the impressive chandeliers in the dining room. The hotel is at the epicenter of the bustling energy that runs throughout the city and is reborn, ready to offer its visitors an experience of luxury and refinement.

Gran Hotel Son Net welcomes guests for a 20th Anniversary celebration offer

www.slh.com/granhotelsonnet

In April 1998, almost 300 hundred years since the Son Next estate was first established, the estate became Mallorca’s first luxury 5* boutique hotel and has since welcomed many returning guests every year. Many travelers fall in love with Son Net and return to indulge in its beauty, to relax or feel at home. The special celebration offer includes a dinner for two featuring an ‘inauguration menu’ from 1998, one bottle of Son Net Cava, Petit Fours, a cabana, free WiFi, 100 Euros Resort Credit per room, an upgrade and even early check-in/late check-out (subject to availability).

Internationally Renowned Fitness Expert in Residency at The Sanchaya

www.slh.com/sanchaya

With an elite clientele including A-list celebrities, f i t n e s s a r t z founder Artur Zolkiewicz is taking ten days to complete a residency at one of Southeast Asia’s most prestigious hotels, The Sanchaya. From 14th – 24th August, UK-based Artur will host morning and afternoon classes on the exclusive estate, in addition to personal training and Q&A sessions. Zolkiewicz’s time at The Sanchaya is a highlight of the hotel’s ongoing programme of visiting specialists, which has also included artists in residence and a series of wine dinners hosted by French winemakers. Zolkiewicz’s fitness schedule will be complemented by a delicious menu of healthy post-workout breakfasts and vegan pea protein powder smoothies. Classes will be available for hotel guests only.

 
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Hotels in the U.S. posted a 1.8 percent year-on-year increase in profit per room in Q1 2018. This marks the third consecutive year of GOPPAR growth for the period, according to the latest poll of full-service hotels in the U.S. from HotStats.

The growth in profit was driven by a 2.2 percent increase in TrevPAR as hotels delivered record revenue increases across all departments.

The 2018 over 2017 Q1 TrevPAR growth contributed to the CAGR increase of +5.0 percent per annum over the last four years, to $259.68 in Q1 2018, an uplift of almost $20 from Q1 2015.

However, amongst the positive growth story, hotels in the U.S. find themselves wrestling with rising costs.

The key cost increase has been labor, which has grown to 35.8 percent of total revenue in Q1 2018 from 33.4 percent in Q1 2015.

Even though GOPPAR reflects a CAGR of +2.9 percent per annum over the last four years, the froth may be coming off profit conversion. GOP as a proportion of total revenue fell to 37.2 percent in Q1 2018, from 37.3 percent in Q1 2017.  Moreover, flow through in the last two years has fallen from 51 percent in Q1 2017 to 31 percent in Q1 2018.

 

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