Hotel profit reaches 50% of 2019 level
NOTE: The previous version of this press release issued on Tuesday stated that the U.S. reached 50% of the comparable “revenue” level from 2019. This corrected version states that the U.S. reached 50% of gross operating profit (GOP) during the month. We apologize for any inconvenience this may cause with updating your story.
GOPPAR, TRevPAR and EBITDA per available room came in higher than any month since February 2020.
- GOPPAR: US$26.79
- TRevPAR: US$86.61
- EBITDA PAR: US$12.77
- LPAR (Labor Costs): US$27.66
Amid hiring difficulties, total labor costs were just 60% of the figure reported for March 2019.
“We have seen continued improvement in room revenue, but with little coming in from F&B and other departments, industry TrevPAR is not gaining as much steam,” said Raquel Ortiz, STR’s assistant director of financial performance. “At the same time, however, the lack of F&B expenses is allowing profit margins to grow closer to normal. Though other revenues are up compared with recent months, we don’t expect to see a significant boost in those numbers until group demand resurfaces.
“Fortunately, not all hotels are struggling. Hotels with enough demand to achieve occupancy levels above 50% have been able to turn a profit. This is especially true for the limited-service segment, where 68% of hotels have remained profitable. These margins are of course at reduced operations in a lot of cases, so some full-service hotels are operating more like limited-service with far less F&B offerings, and some limited-service hotels are operating like extended-stay properties with less daily room cleanings. Overall, profitability is recovering at a slightly quicker pace than anticipated, although the industry has a long way to go.”
Key profitability metrics:
TRevPAR - Total revenue per available room
GOPPAR - Gross operating profit per available room
EBITDA - Earnings before interest, income tax, depreciation, and amortization
LPAR - Total labor costs per available room
STR provides premium data benchmarking, analytics and marketplace insights for global hospitality sectors. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com and costargroup.com.
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