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U.S. hotel profitability improved in September; labor costs exceed 2019

U.S. hotel gross operating profit per available room (GOPPAR) improved from the month prior and exceeded the pre-pandemicUS hotel demand recovery comparable, according to STR‘s September 2022 P&L data release. Additionally, the cost of labor per available room came in higher than the pre-pandemic comparable for the first time.

  • GOPPAR: US$84.03
  • TRevPAR: US$222.97
  • EBITDA PAR: US$60.71
  • LPAR (Labor Costs): US$71.52

“Labor costs moved ahead the 2019 comparable due to continued high levels of hospitality unemployment and more spending on contract labor,” said Raquel Ortiz, STR’s director of financial performance. “Total labor costs were up 5% year to date, with all departments reporting higher expenses, except F&B, due to less group demand earlier this year. “GOPPAR was the strongest since June 2022, and profit margins came in higher than in September 2019. Profit margins have been strong for some time caused by lower employment levels and reduced services.”

Thirteen of the major markets realized both GOPPAR and TrevPAR levels higher than the 2019 comparables. “Miami still remains the front-runner when it comes to both GOPPAR and TrevPAR recovery. Just three of the Top 25 Markets – Minneapolis, New Orleans, and San Francisco – remained below 80% of 2019 GOPPAR levels. While San Francisco is showing some improvement, other business-centric markets, such as Chicago and New York City, saw GOPPAR that was higher than the pre-pandemic comparable,” Ortiz said.

Industry stakeholders interested in Monthly P&L participation should contact MonthlyPnL@STR.com. Those interested in subscribing to reports should contact their account manager or info@STR.com.Key profitability metrics:TRevPAR – Total revenue per available roomGOPPAR – Gross operating profit per available roomEBITDA – Earnings before interest, income tax, depreciation, and amortizationLPAR – Total labor costs per available room

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Tags: labor cost, profitability, STR, US Hotel

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