Profits soar in Germany

    150 150 Daniel Fountain
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    Despite the volcanic ash cloud shutting down airports across Europe, the German hotel market experienced strong growth in April 2010 as the economy recovered from recession. Driven by a 6.4 percentage point increase in room occupancy and 43.3 per cent increase in average room rate, Dusseldorf experienced Revenue per Avaible Room (RevPAR) growth of 62.5 per cent with Gross Operating Profit per Available Room (GOPPAR) increasing by a staggering 249 per cent.

    Similarly, Frankfurt experienced RevPAR growth of 69.2 per cent and GOPPAR increased by 236.7 per cent. According to David Bailey, deputy managing director, TRI Hospitality Consulting “The German hotel market was hit hard by the recession in 2009 and as the economy continues to grow gradually, we are likely to see continued year-on-year increases in performance levels. These increases are, however, from a very low base and it is important to see them in this context”.

    The Vienna hotel market, which also experienced significant declines over the course of 2009, recorded a 2.7 percentage point increase in room occupancy and 32.1 per cent increase in average room rate, resulting in a 37.5 per cent increase in RevPAR. According to statistics compiled by the Vienna Tourist Board, the number of Russian and Italian visitors to the city in April increased by almost 40 per cent while there were declines in the number of British and American visitors. GOPPAR for the Vienna hotel market increased significantly by 114.7 per cent.

    Whilst the travel disruption across Europe resulted in a decline in RevPAR in several European cities in April, nine out of the 10 markets in our sample experienced growth in the calendar year to April 2010. Zurich was the only market in our sample to experience a marginal decline in
    RevPAR levels in the calendar year to April 2010 led by a 4.6 per cent decline in the month of April.

    However, tight control over costs meant that Zurich hotels experienced an increase of 5.7 per cent in GOPPAR over the period.

    Daniel Fountain / 23.06.2010

    Editor, Hotel Designs


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