U.S. hotel profit improved to 60% of 2019 level, labor remains stagnant
BROOMFIELD, Colorado—Gross operating profit for U.S. hotels reached 60% of the comparable 2019 level, according to STR‘s April 2021 monthly P&L data release. While GOP in comparison with 2019 improved from 50% in March, labor spending was up to just 64% in April after coming in at 60% the previous month.
Each of the key profitability metrics, on a per-available-room basis, came in higher than any month since February 2020 except for labor, which was down slightly from March.
- GOPPAR: US$28.67
- TRevPAR: US$87.34
- EBITDA PAR: US$14.12
- LPAR (Labor Costs): US$26.76
“April was an encouraging month as more of the top-line improvement we’ve been reporting on flowed through to the bottom line,” said Raquel Ortiz, STR’s assistant director of financial performance. “On a GOP basis, 92% of our sample hotels were profitable, which is similar to pre-pandemic levels. Also of note, F&B venue revenue, the restaurants and bars, is recovering right in line with room revenue. Overall F&B of course continues to be bogged down by a lack of group demand and the subsequent spending on catering.”
“There is a long way to go, but if demand surges as expected this summer, we should continue to see accelerated profitability and improved margins around the industry,” Ortiz said. “Labor is the hot topic and we’ll continue to monitor that as demand increases and there is even greater competition for workers to service properties.”
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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