U.S. hotels surpassed 2019 profit level in July - Insights
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U.S. hotels surpassed 2019 profit level in July

US hotels profitEstimated U.S. hotel gross operating profit for July 2021 came in at 111% of 2019 comparable, according to STR‘s latest monthly P&L data release.    

In addition to total GOP estimates above July 2019, EBITDA came in at 116% of the pre-pandemic comparable. On a per-available-room basis, each of the key profitability metrics, aside from labor, came in higher than any month since February 2020.

  • GOPPAR: US$62.33
  • TRevPAR: US$156.58
  • EBITDA PAR: US$41.81
  • LPAR (Labor Costs): US$46.24

“It is first important to note that one, or even a few months, with higher GOP than 2019 does not mean the industry has recovered,” said Raquel Ortiz, STR assistant director of financial performance. “As we’ve noted recently in the top-line metrics, the industry is heading into the lower season as summer wraps up, but looking back, we see just how high the surge in leisure demand pushed U.S. profitability in recent months. There was also the inflation impact on room rates to consider. We would expect similar, perhaps a bit lower, results in August data before seeing a drop-off in September.

“The July numbers were less impressive when focusing in on just the major markets, which are mostly below 50% of 2019 revenue. However, like the rest of the country, those key metro areas are showing margins in line with 2019 because of leaner operations.”

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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