U.S. hotel labor flat despite occupancy uptick - Insights
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U.S. hotel labor flat despite occupancy uptick

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US hotel occupancy laborGross operating profit for U.S. hotels reached 70% of the comparable 2019 level, according to STR‘s May 2021 monthly P&L data release. While demand, revenues, and GOP continue to uptick, labor spending remained flat from the previous month at 64%.     

Each of the key profitability metrics, on a per-available-room basis, came in higher than any month since February 2020 except for labor.

  • GOPPAR: US$37.30
  • TRevPAR: US$102.52
  • EBITDA PAR: US$22.54
  • LPAR (Labor Costs): US$30.96

STR

“May was another step forward as more economic reopening and more demand pushed industry-wide profitability further upward,” said Raquel Ortiz, STR’s assistant director of financial performance. “Overall, 95% of hotels broke even on a GOP basis, while 73% broke even on a net income basis. For context, those percentages were 98% and 85% in May 2019, so while the improvement is encouraging, many hotels are still experiencing financial difficulty, and even more are seeing staffing issues as evidenced by the stagnant rate of labor costs.

“Many of the properties still experiencing significant struggles are those in the major metros. Those markets finally each reached positive GOPPAR territory, with the warm weather and beach markets like Miami, Phoenix, L.A. and San Diego performing the best.”

STR

Industry stakeholders interested in Monthly P&L participation should contact [email protected]. Those interested in subscribing to reports should contact their account manager or [email protected].

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

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