Hotel Revenue: Beyond Prices, Costs Impact Profitability

MKG Consulting has examined the burden of expenses for hoteliers located in France, Germany, Belgium, Italy, and Spain. A common trend across these countries is a double-digit increase in costs, with varying impacts depending on the country.

For example, in France, while RevPAR increased by 22% compared to 2019, purchases (consumables, cleaning products, etc.) went up by 15% and personnel costs by 12%. Additionally, energy costs rose by 18% for electricity and 16% for gas, amid an international context where businesses lack visibility on the subject.

It's observed that in Southern Europe, cost increases have been offset by even higher revenue growth, thanks to pricing power. This is particularly true in Italy, which emerges as the biggest winner in recent months (although there is partly a catch-up effect from two lost decades, with a 2019 RevPAR that was lower than that of the year 2000...).

Conversely, Northern Europe is experiencing a significant "scissor effect" with cost increases far exceeding business activity growth. For instance, in Germany, personnel costs have increased by 33%, eroding margins generated by a RevPAR increase of 5.7%. This explains the renewed interest of German operators in the French market at present.

In Belgium, it is the price increases for gas that have most significantly impacted operating costs, with a surge of +70%.

2024 seems to mark a return to more dynamic activity in Germany, which should allow hoteliers to regain margin, especially thanks to events like Euro 2024 and the 35th anniversary of the fall of the Berlin Wall. However, even if inflation stabilizes, the production costs of hotel services do not decrease.