Recovery of U.S. hotel profitability stalled in October - Insights
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Recovery of U.S. hotel profitability stalled in October

U.S. hotel profitabilityU.S. hotel profitability increased from the previous month on a per-available-room basis but was down when indexed to 2019, according to STR‘s October 2021 monthly P&L data release.    

All of the key profitability metrics increased from September as October is historically a higher revenue month.

  • GOPPAR: US$62.75
  • TRevPAR: US$165.03
  • EBITDA PAR: US$44.14
  • LPAR (Labor Costs): US$52.17

Estimated industrywide gross operating profit was 89% of the 2019 comparable, after coming in at 97% when using the same index comparison in September. Labor costs reached 91% of pre-pandemic comparables in October after reaching a high of 96% in September.

“October data was important to analyze from multiple angles,” said Raquel Ortiz, STR’s assistant director of financial performance. “The metrics were up quite a bit from September if you measure by available rooms, but that’s to be expected as October is usually a stronger revenue month due to conferences and group travel. When you extrapolate and bring in the comparison to pre-pandemic times, performance was lower. Fortunately, even with less corporate business this year, profit margins (38%) still came relatively close to what we saw in 2019 (40.9%).”

Of note among major markets, Miami’s October year-to-date GOPPAR level surpassed the comparable 2019 level, while San Francisco moved into positive GOPPAR territory when averaging the first 10 months of the year.

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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