Paris hit hardest as hotel profits fall

Profit and occupancy fell in most key European hotel city markets during September, according to the latest HotStats from TRI Hospitality Consulting. Average occupancy was down in all of the 10 cities surveyed, and only Hamburg reported a year-on-year increase in profit.

Income before fixed charges (IBFC) - also known as gross operating profit - fell the furthest in the French capital, down by 31.7 per cent to a daily figure of EUR 98.83 per available room. In absolute terms, the profit plunge knocked Paris into fourth place in the table behind London, Amsterdam and Berlin, the three most profitable markets in the survey. Amsterdam and Vienna also experienced significant drops in demand and profit. Average occupancy in the Dutch capital fell by 9 percentage points to 80.7 per cent contributing to revpar down by 14.3% and daily IBFC down by 22.6% to EUR 100.11 per available room.

Vienna's occupancy declined by 9.2% points to 79.8% and although average rate only dipped, the upward shift in payroll was another factor in causing daily IBFC to drop 27.2% to EUR 81.24 per available room.

'September represents the second consecutive month of falling demand in most European markets, and suggests a rapidly deteriorating trading environment. Hoteliers now have a real fight on their hands to uphold their rate growth policies and sustain profitability,' said Jonathan Langston, managing director, TRI Hospitality Consulting.