ASM Pilot Takes Off

21 March 2011

The Northern Ireland Hotels Federation has recently completed a pilot Hotel Performance Survey with ASM. Its purpose is to provide you with a regular snapshot of how the hotel sector in Northern Ireland is performing, with a more rounded assessment of key performance indicators.

Michael Williamson, Director at ASM, said "Many people are familiar with the measurements associated with rooms, Occupancy, Average Daily Rate and RevPAR which are included in this survey. However, ASM and NIHF were keen to assess performance across a wider range of functions giving a more in-depth analysis for hoteliers in the province. We concluded that in additional to the room measurements we should add an additional three Key Performance Indicators to give a fuller picture."

The survey covers six KPI's: Room Occupancy, Average Daily Rate, Revenue per available Room (RevPAR) as well as Total Revenue per available room (TrevPAR), the Payroll cost ratio and Gross Operating Profit per available room (GOP PAR).

The survey has been run as a pilot with 13 NIHF Members contributing to the first report and comparing the last quarter of 2010 with final quarter 2009. The plan is to expand the survey and offer to all NIHF members from April onwards. Those who contribute will also have access to an individual report showing their position against the regional average which will be available on a confidential basis from ASM.

The report highlights the difficult trading situation for the Province's hotels. The average performance level of hotels throughout Northern Ireland in the 3 month period to 31 December 2010, compared to the same period in 2009, is somewhat disappointing. Bedroom demand has slipped back by 2.1 percentage points over the quarter, while achieved room rate (ARR) is lower by 3.7%, averaging out at £60.53 for the 3 months. It is likely that the difficult weather conditions had some impact on bedroom demand and achieved rates during December 2010, but this is unlikely to account for all of the substantial reduction in year on year rooms revenue per available room (RevPAR -7.3%).

As was the case elsewhere in Northern Ireland, the unseasonal weather conditions during December 2010 caused havoc with rooms demand and social events in Belfast. This may go some way to explaining the reduction in bedroom occupancy, achieved room rates and TrevPAR, but is unlikely to be the only cause given the relatively large reduction in this KPI. An increase in Payroll ratio and the massive 30% drop in GOP Par are extremely worrisome.

Derry City has always played second fiddle to Belfast in terms of hotel performance and while the wider North West region has experienced more than its fair share of economic bad news over the past 2 years or so, there are some positives to be taken from the performance of the hotel sector in Quarter 4, 2010. Occupancy has grown, although from a small base and payroll costs have been well contained. However GOP PAR has reduced by 22.1% showing rising costs and the challenge for hoteliers in the city will be driving GOP PAR to levels that at least match the Northern Ireland average.

Concerns for 2011 include the increase in vat from 17.5% to 20%, the threat of a rise in interest rates and increasing energy costs. These factors coupled with a downturn in tourism form the Irish Republic and a reduction in access make for difficult times in the coming year.

A full copy of this report, including detailed breakdowns for Belfast and L'Derry, is available to members of the NIHF in the Members area of the NIHF website The survey will be compiled in April for the Quarter 1 comparisons and all members are encouraged to take part.

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