Skip to content

Search

Latest Stories

HotStats: Asia-Pacific numbers predict U.S. revenue decline

Profits could drop 40 to 60 percent due to pandemic related downturn

TROUBLE IN THE Asia-Pacific region could foreshadow an “ugly March and April” in the U.S. market as profits potentially drop 40 to 60 percent compared to last year, according to HotStats.

HotStats’ “Suntrust Robinson Humphrey February 2020 Hotel P&L Analyzer” found China’s total RevPAR dropped 51 percent in February compared to last year while GOPPAR dropped 108.3 percent. The novel coronavirus currently causing a pandemic around the world originated in China.


“Assuming continued containment in major Asian countries, results in March and April could be somewhat of an indicator for the North American and European recovery (hopefully) later this year, although we note that domestic Chinese travel will likely rebound faster than international inbounds (and Asian inbounds likely faster than Europe and North America given flight restrictions),” the Suntrust report said.

Two other Asia-Pacific countries, Australia and Japan, which have labor costs more comparable to the U.S., provide a more accurate forecast. Japan’s year-to-date total RevPAR is down 11 percent and GOPPAR is down 29 percent underr last year. Sydney’s total RevPAR went down 8.1 with a 13.5 percent drop in GOPPAR, and Melbourne’s total RevPAR was down 6.9 percent while GOPPAR dropped 10.9 percent.

“We find this range a good starting place for evaluating the potential profit loss for upper upscale and luxury hotels in the U.S. given the unprecedented situation of hotels running very low occupancy,” the report said. “We advise clients that the material EBITDA margin reductions after 9/11 and the global financial crisis of 2008 provide modest precedence. U.S. rooms RevPAR fell at peak 30 to 35 percent in the worst month and by and large most hotels stayed open. Having hotels close en masse has not occurred since the Great Depression, where hoteliers sometimes kept room lights on simply to give the impression that hotels were busy.”

In March, HotStats provided tips on how to survive the COVID-19 economic crisis.

More for you

CBRE: US Hotel RevPAR to Grow 1.3 Percent in 2025

CBRE: RevPAR to grow 1.3 percent in 2025

U.S. HOTEL REVPAR is expected to grow 1.3 percent in 2025, supported by urban markets from group and business travel and increased demand for drive-to and regional leisure destinations, according to CBRE. Occupancy is forecast to rise 14 basis points and ADR 1.2 percent year-over-year.

This represents slower growth than CBRE’s February forecast, which projected 2 percent RevPAR growth based on a 21-basis-point increase in occupancy and a 1.6 percent rise in ADR, the commercial real estate and investment firm said.

Keep ReadingShow less
Palette Hotels to Transform DoubleTree by Hilton in Washington, PA

Palette to manage Washington, PA, DoubleTree

Palette’s Expertise in Hospitality Management

SUNRISE GOLD HOSPITALITY recently selected Palette Hotels to manage its 140-room DoubleTree by Hilton Washington Meadow Lands Casino Area in Washington, Pennsylvania. Palette will oversee renovations, including Hilton Connected Rooms technology upgrades, new signage, landscaping, building systems and updates to the lobby, guestrooms, bathrooms, meeting spaces, restaurant, bar and lounge.

Sunrise Gold Hospitality is led by owner Ramesh Pandya, and Palette Hotels by Founder and CEO Richard Lou.

Keep ReadingShow less