U.S. hotel profitability dipped in August - Insights
Global News

U.S. hotel profitability dipped in August

US hotel profitWith the end of the summer travel surge, estimated gross operating profit for U.S. hotels came in lower than the previous month, according to STR‘s August 2021 monthly P&L data release.    

August GOP was lower on a per-available-room basis as well as when indexed to the comparable month from 2019. Estimated GOP was 111% of 2019 levels in July but just 94% in August. The only key profitability metric to increase month over month was labor per available room.

  • GOPPAR: US$49.31
  • TRevPAR: US$146.22
  • EBITDA PAR: US$32.13
  • LPAR (Labor Costs): US$47.99

“Lower profitability levels were not surprising given the lower top-line performance we reported for the month,” said Raquel Ortiz, STR’s assistant director of financial performance. “There was a decline in the percentage of U.S. hotels to break even on both a GOP and net income basis, and labor costs were up even with weakened demand. An encouraging sign came in the major markets, with improved TrevPAR and GOPPAR indices because of higher realized occupancies, but obviously those markets have the longest way to go.

“July was likely the profitability peak for this part of the recovery cycle, but September P&L data will be quite interesting given the gains we’ve seen in group demand over the last few weeks. F&B revenues, specifically in the catering departments, have been incredibly low because of the low volume of events in hotels.”

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

Tags: ,

Related Courses

Related Articles

Companies consider new business travel program approaches
U.S. hotel results for week ending 25 September

You might also like:

Join over 60,000 industry leaders.

Receive daily leadership insights and stay ahead of the competition.

Most popular:

Popular this week: