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Hotels seek out the ordinary in 2022

Updated: Mar 28, 2022

Hoteliers appreciate predictability. It aids in setting labour schedules, revenue management optimisation, food cost containment and as a hedge against a variety of other line items impacting hotel operations on a daily, weekly, monthly and yearly basis.

The past two years have been anything but formulaic and the crisis in Ukraine could keep it that way. Hotels, at the mercy of the pandemic, have been bounced to and fro like a dinghy in the middle of a sea storm. Calmer waters may soon prevail, but data points to a recovery that is anything but gangbuster.

Europe Alarm

In a worrisome sign, Europe profit in January fell into negative territory for the first time since April 2021, according to data from HotStats. After plateauing at €47.61 in October 2021, GOPPAR has fallen for the three months after, hitting €-5.08 in January, 119% lower than January 2019. The good news is that January is typically the poorest performing month for hotels on a seasonality basis, but the turn into the red is concerning.

All top-line indicators dropped, leading to total revenue of €65.37, which was €56 lower than at the same period in 2019. The drop in revenue was met by an uneven expense flow. Labour, still a thorn in the side of hoteliers, remains rather muted on a cost basis. At €35.85, total payroll on a per-available-room basis is €22 higher than it was at its nadir in April 2020. It remains around €15 lower than its normal traditional level.

Concurrent with the lower labour cost was a surge in utility expense. Utilities have risen to their highest level since 2018 and in January hit €7.36 on a PAR basis, nearly €2 higher than in January 2019. The largest cost, electricity, is now three times higher on a PAR basis than in January 2019.


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