COVID-19 Webinar Summary: Five key points on Monthly P&L
STR recently launched Monthly P&L reporting, providing hotel operators an in-depth and timely look at profitability, which is especially valuable during the COVID-19 crisis. A summary of key points from the program’s introductory webinar is below.
Monthly P&L reporting based on four primary KPIs
While March 2019 KPIs provide a picture of profitability performance in a “normal” month, March 2020 KPIs demonstrate how COVID-19 has impacted hotel profitability, with EBITDA per available room down 116.8% year-over-year.
Vanishing group demand wipes out Other F&B Revenue
Other F&B Revenue, which includes meeting space rental, AV equipment rental, and service charges from the F&B department, declined 92.2% in March 2020.
Full-service hotels struggle
Full-service hotel TrevPAR declined worse than 10 percentage points more than select-service hotel TrevPAR. This is reflected in class data, with the Luxury and Upper Upscale classes experiencing the largest profitability declines.
Markets with early shutdowns, virus hotspots most impacted in March
New York and Chicago stand out from a profitability perspective. These union-heavy markets typically run high occupancies and have less flexibility in terms of staffing, leading to smaller profit margins and steeper profitability declines.
Nearly 100% decline in profit margin in harder-hit markets
In New York and Seattle, every dollar earned in revenue corresponds to over $0.90 lost in profit.