Time for creativity as costs rise

The latest Quarterly Hotel Performance Update with HotStats and HOSPA, hosted by Hotstats CEO Michael Grove and Jane Pendlebury, CEO of HOSPA, illustrated the cost pressures being faced by the hotel sector.

Grove told attendees: “Revenues have been slowing [around the world] over the past 12 months. Revenues are growing slower than costs, which is an issue for the hotel sector. Europe is still heading upwards, but slower than when we were ramping up at the back end of the crisis.”

For the year-to-date 2025, trevpar was up 3.1% in Europe and goppar up 2.8%.

He added: [The sector] has seen topline growth which has in general flowed through to the bottom line. The picture is more nuanced across Europe. In the UK goppar is down 6.6% with trevpar down 0.8%, mixed with labour increases of 4.3%.”

Grove said that the impact of the increased cost of labour due to growth in National Insurance contributions had been 1% of profit, coming after several years of profits being pushed back by F&B and energy costs.

He said: “We are looking at substantial labour increases YTD, with rooms up 6.1%, F&B up 4.5% and total payroll up 5.3%.”

In May provincial hotels saw goppar down 6.4% and trevpar down 0.3%, with labour PAR up by 5.9%. We are looking at substantial labour increases YTD, with rooms up 6.1%, F&B up 4.5% and total payroll up 5.3%.

Grove said: “We are going into a much more difficult time when labour costs are growing more than revenue in the UK. London continues to outperform the rest of the UK because of the fundamentals it has. It’s unlike any other city in the UK and much of Europe, even as we add a significant amount of supply in the market.

“The challenge for us is that the retail, wholesale and corporate negotiated segments make up a large part of the pie and you see little growth in those segments.

“Global revenue growth is slowing, it’s time to get around the table and get creative to find other revenue streams.”