Data & Research

Asia-Pacific Hotels Post Monthly Performance Gains

June 26, 2020

LONDON—Asia-Pacific hotels may have reached their bottom. Gross operating profit per available room (GOPPAR) in May showed its first month-over-month (MOM) since December 2019, up 78.2% MOM jump, and at -$3.04 is making strides towards breaking-even after turning negative in March.

Occupancy in May was up 7.4 percentage points compared to April to 26.6%. Though this is still 43.6 percentage points below May 2019 numbers, it’s the first time since February that occupancy placed above 25% in the region. This rise in volume drove the 39.5% MOM surge in RevPAR. Further contributing to the top-line, F&B revenue per available room was up by 89.8% MOM, resulting in a much needed 48.1% MOM expansion of TRevPAR
The 52% flex recorded in May is evidence of the effective cost control measures implemented in the region. (Flex is the amount of profit that is saved when there is a revenue shortfall.) Despite top-line growth, hoteliers in APAC were able to avoid cost creep and managed to reduce labor costs and overheads by 6.7% and 1.3%, respectively and on a MOM basis. As a result, profit conversion in May was recorded at -7.5% of total revenue, placing 43.4 percentage points above the previous month.

Profit & Loss Performance Indicators – APAC (in USD)

KPI

May 2020 v. May 2019

YTD 2020 v. YTD 2019

RevPAR

-75.1% to $22.55

-60.6% to $37.49

TRevPAR

-74.2% to $40.51

-58.8% to $67.16

Payroll PAR

-51.0% to $22.38

-32.2% to $32.03

GOPPAR

-105.8% to -$3.04

-94.0% to $3.37

Although still on the negative side of the number line, profit-per-room in Jakarta showed the first signs of recovery in May, as GOPPAR grew by 10.4% on a MOM basis, the first positive change in the city since March.

May occupancy was up by 2.3 percentage points compared to April, albeit remaining below the two-digit threshold. A 25.1% MOM decline in average rate dampened the effect of this volume increase over RevPAR, which still managed to climb by 1.6% compared to the previous month. TRevPAR jumped by 15.2% MOM, fueled by a 100% increase in F&B revenue per available room.

On the expense side, hoteliers managed to decrease total overheads by 10.6% MOM, though labor costs recorded a monthly uptick of 2.7%. Flex for the city placed at 54%, and profit conversion of total revenue was recorded at -204.0%, far from ideal, but still 58.2 percentage points higher than April.

Profit & Loss Performance Indicators – Jakarta (in USD)

KPI

May 2020 v. May 2019

YTD 2020 v. YTD 2019

RevPAR

-88.9% to $6.24

-50.5% to $32.85

TRevPAR

-90.3% to $11.01

-46.2% to $67.83

Payroll PAR

-46.1% to $21.16

-22.1% to $30.85

GOPPAR

-190.4% to -$22.46

-88.1% to $4.08

The Labor Day holiday (May 1-5) resulted in more than 104 million domestic tourist trips in China, according to the Ministry of Culture and Tourism. In Shanghai, this heightened activity translated into positive per-room profits for the first time since turning negative in February. GOPPAR in the city surged by 182.4% in May compared to April to $8.35.

Occupancy in Shanghai recorded its third consecutive MOM increase in May to 35.3%, a 12.3-percentage-point improvement from April. This volume expansion, combined with a 7.0% MOM average rate climb, resulted in a 64.6% MOM RevPAR increase. F&B revenue per available room soared by 179.5% MOM, leading to 84.1% growth in TRevPAR compared to the previous month.

Amid top-line growth, hoteliers in Shanghai achieved a 2.4% MOM reduction in labor costs and a 5.6% MOM uptick in total overheads. Flex placed at 44.1% and profit conversion in May was recorded at 14.9% of total revenue, 48.1 percentage points above April results.

Profit & Loss Performance Indicators – Shanghai Municipality (in USD)

KPI

May 2020 v. May 2019

YTD 2020 v. YTD 2019

RevPAR

-67.8% to $32.87

-72.0% to $25.83

TRevPAR

-66.4% to $56.21

-69.4% to $47.17

Payroll PAR

-44.6% to $24.23

-31.5% to $30.32

GOPPAR

-88.1% to $8.35

-111.3% to -$6.54

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