HotStats: Hotels register strong performance in the first quarter

THE PERFORMANCE OF U.S. hotels ended strong in the first quarter with March profit surging across most global regions, according to HotStats. The research firm said stronger revenues, better conversion rates and less worry by travelers about a COVID upsurge drove the first quarter surge in performance.

During the quarter U.S. hotels saw an increase in its operating fortunes, according to a blog post on the HotStats website. GOPPAR in March 2022 was up $70 over January 2022 and at $90 was closing in on March 2019’s level. It was the highest profit month in the U.S. since February 2020, the last normalized month of performance before COVID-19 reframed the world.

ADR growth in the U.S. led the way in recovery with March ADR on a nominal basis was at its highest level since October 2018.

The blog post said that U.S. hotel operators managed to convert much of the revenue bounce into profit. The flow-through rate, the percentage of incremental profit that flows to the bottom line from each incremental dollar of top-line revenue, was more than 50 percent in the month.

Though labor costs are moving upward month to month, they aren’t moving at a rate higher than the increases in total revenue, HotStats said. Association and convention volume reached its highest rate during the month since March 2020.

In a recent post, HotStats said that monitoring GOPPAR performance allows hoteliers to make smart decisions about running their business.