U.S. hotel profitability hits pandemic high
GOPPAR had come in no higher than US$12.69 for any month since the pandemic’s initial impact on industry performance last March. In addition to improved absolute levels in the profitability metrics, year-over-year comparisons were less steep.
- GOPPAR: US$17.35 (-83.3%)
- TRevPAR: US$85.11 (-67.4%)
- EBITDA PAR: US$0.14 (-99.8%)
- LPAR (Labor Costs): US$34.26 (-60.2%)
“Year-over-year percentage changes will turn positive in future P&L data releases due to comparison with pandemic low months last year,” said Raquel Ortiz, STR’s assistant director of financial performance. “Additionally, the industry’s top-line metrics have been trending at their highest levels in more than a year, as shown in our recent weekly data releases for March, and the uptick should extend to the bottom line as properties generate more room revenue while still maintaining operational efficiencies developed this last year. Roughly 50% occupancy is the still the general break-even point for turning a profit, but only 44% of properties reached positive GOP territory in February—the percentage was lower on a net income level. With most of the demand in the marketplace being leisure-driven, the major markets, most dependent on business and group demand, continue to struggle the most even with some improvement last month.”
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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