GOPPAR Bounces Back, But Cost Concerns Remain at U.S. Hotels

  • HotStats
  • 07.19.19
After a negative turn in April, profit per room at U.S. hotels bounced back in May, increasing by 2.0 percent year-over-year, buoyed by growth across all revenue centers, according to the latest data from HotStats.

GOPPAR was recorded at $112.80 in May, and while this was 4.7 percent above the year-to-date GOPPAR figure at $107.73, it was almost $6 below the profit level in April at $118.51.
 
This was a function of demand, albeit a significant acceleration in costs was recorded in May, including a 4.7 percent YOY increase in payroll to $97.49, on a per-available-room basis.
 
It was a positive month of revenue growth across all departments, with YOY revenue increases recorded in food/beverage (up 3.5 percent) and conference/banqueting (up 2.4 percent), on a per-available-room basis.
 
This was supported by a 2.0 percent increase in RevPAR, as hotels in the U.S. successfully resumed growth in achieved average room rate, following a decline in April, increasing by 1.5 percent in the month to $215.22. This was led by growth in rate in the corporate (up 1.3 percent) and residential conference (up 2.1 percent) segments. 
 
Growth across rooms and non-rooms departments contributed to the 3.4 percent YOY increase in TRevPAR to $283.54.

Profit & Loss Key Performance Indicators – U.S. (in USD)



“Despite resuming growth in revenue this month, hoteliers in the U.S. are reminded to keep an eye on creeping costs and their impact on profit,” said David Eisen, director of hotel intelligence & customer solutions for the Americas, at HotStats. “Payroll, for one, continues to be a thorny issue that hoteliers need to stay vigilant on.” 
 
This threat to profit is no better illustrated than in San Francisco, where a 4.2 percent YOY increase in TRevPAR to $355.83 was effectively eradicated by escalating expenses, like payroll, which was up 9.3 percent YOY to $147.77 on a per-available-room basis, and equivalent to 41.5 percent of total revenue. 
 
After a challenging period of operation in recent years, growth in TRevPAR in the Bay City has accelerated in the last six months, but this has not necessarily flowed through to the bottom line.
 
Profit & Loss Key Performance Indicators – San Francisco (in USD)



It was a similar story down the coast in Los Angeles, as hotels there suffered a 4.7 percent drop in GOPPAR to $81.66.
 
This was the third consecutive month of heavy profit decline, as payroll levels increased by 5.4 percent YOY to $102.47 and overheads grew by 5.7 percent to $58.32, on a per-available-room basis.
 
The uptick in labor canceled out the 1.4 percent increase in TRevPAR, which came despite an uneven performance in the non-rooms departments.
 
It was on the back of a 0.7 percent YOY increase in RevPAR to $168.33, which came despite a seventh consecutive month of decline in achieved average room rate.
 
Profit & Loss Key Performance Indicators – Los Angeles (in USD)

HotStats provides internal and external benchmarking and market reporting for the global hospitality industry that allows hoteliers to measure performance across more than 500 key performance indicators. Monthly P&L data benchmarking helps hoteliers move past the antiquated idea that driving rooms revenue is the only thing that matters in a hotel, when a holistic approach that examines both expense and total revenue is critical.


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