Profitability suffers among Madrid hotels

Reports indicate that the hotels in Madrid experienced some falls in profitability during the month of May when compared to the same period last year. This is somewhat surprising since most hotels in in other parts of Spain actually experienced a general increase of revenue per available room (RevPAR) during the same month.

The information was recorded in the latest report from HotStats prepared by TRI Hospitality Consulting in collaboration with the Confederation of Hotels and Tourist Accommodation in Spain (CEHAT). The report examined mainly 4 and 5 star hotels under recognized brands in five different cities in Spain, namely, Madrid, Barcelona, Valencia, Seville and Mallorca .

Four star establishments in Madrid delivered the worst results among the hotels examined in the report and the RevPAR actually fell by some 19.8 percent to €66.43 in May this year compared to €82.8o last year. The decline in profitability among five star hotels in Madrid was less pronounced. The RevPar stood at €165.05 which is just 2.5 percent lower than in 2010 and the average room price decreased by 2.8 percent to €214.78. Occupancy levels were up ever so slightly by 0.2 percent. A fall in gross operational profit (GopPar) of 35.1 percent was recorded in 4 star hotels and 8.2 percent in the 5 star hotels in Madrid.

The results in Palma de Mallorca were also slightly lower than in May 2010, with 1.9% less in RevPAR being recorded which is down 1% on average and occupancy down by 0.6% compared to May 2010. These figures meant a drop in GopPar of 7.2% in the city. Hotels in Seville are now recovering profitability after showing poor results for April. The growth in  RevPAR was 33.9 percent at €91.10 and the average price in the city rose by 24% and occupancy increased 5.6 points. The positive growth in revenue helped the growth of GopPar which was up 61.5% in May. Hotels in Barcelona delivered better results both in terms of occupancy rates and average price with an increase of 26.3% in RevPAR in 4 star hotels and 25.8% in the 5 star hotels of the city over the same period last year. Thanks to increases in revenue and a continued focus on controlling costs, the hotels in Barcelona achieved a gross operational profit of 44.3% and 47.7% in 4 star and 5 star establishments respectively. The hotels in Valencia also showed positive results achieving a 2.3% increase in occupancy for May and an increase of 15.3% in RevPAR at €48.06 and an increase in the average price of 10.9%, up from €73.22 in May 2010 to €81.19 this year.

This entry is filed under Madrid Hotels.