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Hotels strong despite unease


The global hotel industry is producing strong performance numbers all against a climate of financial unease. It’s an incongruity that hoteliers hope sustains.


Consumer costs for everything, including hotel rooms, are up. The list is long: gas prices, food prices, airfare prices (not to mention a wave of air cancellations) are all at dizzying highs. The list is long and induces unease, but consumers are still, it appears, willing to put them aside in order to travel.


In Europe, occupancy rates are at their highest levels since November 2019 and in tandem with average daily rates that are now on par or higher than pre-pandemic 2019, on a nominal basis. May 2022 European ADR was €30 higher than in May 2019 and is now up 127% since its all-time low in May 2020.


The strong room performance carried through into ancillary revenue. Food and beverage revenue has been on a steady incline since January of this year and now sits $6 off its May 2019 level on a per-available-room basis. The combined efforts in the room and F&B departments pushed total revenue to €184 on a per-available-room basis, its highest level since October 2019.


The healthy top-line performance carried through to the bottom line as hoteliers were able to keep expenses in check as best they could. Despite a global energy crisis, utility expenses actually fell in May against the four previous months to around €7 per available room. Still, utility costs remain at all-time highs and May’s level was nearly €2 higher than in May 2019.


Meanwhile, labour costs are trending up and hit €52 per available room in May, which is now on par with pre-pandemic labour costs.


Gross operating profit per available room (GOPPAR) was recorded at €71, now up €75 since GOPPAR turned negative in January 2022. May’s GOPPAR is now at the same level as May 2019.

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