Card commissions are the fastest-growing line in the European hotel P&L, and Southern Eu

HotStats, the benchmarking firm owned by Duetto, reported this month that credit card commissions across Europe, the Middle East and Africa grew 7.9% year on year, more than double the rate of revenue growth and the fastest-growing single line in the hotel profit and loss account. Loyalty programme spend grew 5.1%, also ahead of revenue. In Southern Europe, the strongest-performing region on the continent all year, gross operating profit per available room dipped in July while total revenue per available room kept climbing.

This piece is for independent hoteliers and commercial managers building a 2027 budget this quarter. The July version of this article argued that the gap between revenue and profit is a labour and commission story, and illustrated it with a modelled property. That example has been removed, and the argument has been rebuilt on the disclosed figures, because the modelled version overstated how evenly the gap appears.

The fastest-growing cost in the European P&L is the one nobody negotiates

Credit card commissions at 7.9% growth sit above labour, above loyalty, above every other line HotStats tracks in the region. It is also the line an independent hotel has least practice managing, because it arrives as a blended rate on a merchant statement rather than as a contract renewal with a named counterparty.

The mechanism is worth being precise about, since the reason is only partly the fee schedule. A merchant rate is not one number, it varies by card type, and a payment mix shifting toward premium consumer and commercial cards raises the effective rate even where no published rate changed. The other half is volume: as the share of bookings paid at the time of booking rises, more of a property's revenue passes through a card at all. That is the same structural shift covered when Booking.com crossed 70% of its bookings on merchant payments, and it lands on the payments line as well as the cash flow one.

What HotStats does not publish, and what no public dataset covers, is the split of that 7.9% between rate and mix. A property can find its own split in one afternoon by pulling six months of merchant statements and breaking the effective rate out by card type, and that is the only place the answer currently exists.

Southern Europe is where the early wobble showed, and it is the region holding the average up

The regional spread matters more than the EMEA average, because the average is being carried by one region.

Southern Europe runs at roughly €272 total revenue per available room against Eastern Europe's €140, with Northern and Western Europe clustered just under €195. A continental average built on that spread describes no actual market, which is why a budget checked against the EMEA number tells an operator in Porto or Kraków very little.

Southern Europe is also where the first sign appeared. Profit per available room dipped there in July while revenue rose, which is a small move and an early one, and the sort of divergence that shows up in a monthly series long before it shows up in a full-year result.

The Middle East shows what happens when the same cost base meets falling revenue

The sharpest illustration in the HotStats data runs the other way round. In Middle Eastern markets where revenue is falling, profit is falling roughly 1.5 to 2 times as fast, because costs do not come back down at the speed they went up.

That asymmetry is the whole of flow-through in one line. A cost base built during a demand surge is rebuilt from wages, contracted services and payment volumes that are set annually or contractually, so a revenue decline passes through to profit amplified rather than proportional. It is also the reason a budget that models costs as a fixed share of revenue will be wrong in both directions, understating the damage in a soft year and overstating the gain in a strong one.

The counter-case is that the average margin is still expanding

The argument against treating this as an emergency is in the same dataset. Revenue is growing in every European sub-region, and margins across the region are on average expanding. HotStats is describing specific lines running ahead of revenue inside a picture that is broadly healthy, not a margin collapse.

There is also a self-interest note worth making plainly. HotStats sells profit benchmarking, and the conclusion its analysis reaches is that operators need full profit and loss visibility in one place. That does not make the figures wrong, since they come from submitted property-level accounts rather than a model, but the framing is the framing of a company selling the remedy.

What this does not tell an independent hotel about its own building

The HotStats panel is benchmarked hotels submitting full accounts, which skews toward larger and branded properties with the finance function to submit them. A 30-room independent in the same city may sit well outside those averages in either direction, and no public dataset reports gross operating profit margin ranges for hotels of that size in Europe. Any figure circulating for what a small independent typically earns is modelled, not reported, which is why the July version of this article should not have used one.

Operators are splitting on what to do with the quarter. Some are rebuilding the 2027 budget from the cost lines upward, taking wage schedules already legislated in their own market, the merchant rate off their own statements and their own utility contracts, then checking the result against a revenue forecast rather than deriving costs from it. Others are budgeting the top line as before and adding a single sensitivity, on the view that a property without a finance team gets more from one honest downside case than from a cost model it cannot maintain.

The one number HotStats has published that applies to both is the Middle East ratio. Where revenue falls, profit falls between one and a half and two times as fast, and a budget that assumes the two move together is wrong by that multiple before anything else goes wrong.