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U.S. hotel profitability reached 28-month high in March

U.S. hotel profitabilityU.S. hotel gross operating profit per available room (GOPPAR) reached its highest level since November 2019, according to STR‘s March 2022 P&L data release.    

The GOPPAR level was less than $10 shy of reaching the pre-pandemic comparable from March 2019.

  • GOPPAR: US$83.81
  • TRevPAR: US$204.84
  • EBITDA PAR: US$62.68
  • LPAR (Labor Costs): US$61.45

EBITDA PAR was the industry’s highest since November 2019, while TrevPAR and LPAR were the highest since March 2020.

“Aligned with jumps in top-line performance that have continued into April, each of the bottom-line metrics showed drastic improvement in March due to spring break travel and increased room rates,” said Raquel Ortiz, STR’s director of financial performance. “Overall, the metrics indexed at roughly 90% of pre-pandemic levels. Also reaching pandemic-era indexed highs were meeting space rentals (96), A/V rentals (85) and catering & banquets (72), which are connected to an uptick in group travel. Of course, some of the growth is inflationary, and much of the group demand is leisure-based at this point in the recovery, but there have been gains from the corporate sector as well.”

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Eight of the major markets realized GOPPAR levels higher than 2019 comparables.

“Beach destinations continued to lead in both GOPPAR and TrevPAR recovery, with Miami hitting 141% of 2019 levels. On the other hand, San Francisco, which has improved recently, is still trekking behind other markets in terms of both GOPPAR and TrevPAR. Overall, eight of the Top 25 Markets saw GOPPAR surpass March 2019 levels,” Ortiz said.

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: ADR, GOPPAR, hotel occupancy, hotel performance, hotel results, Miami, San Francisco

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