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HotStats: U.S. hotel profits lag behind global markets

STR also records slower performance in August

U.S. HOTELS ARE lagging behind other global markets in profitability in August as the nation surpassed 200,000 deaths from the COVID-19 pandemic, according to HotStats. STR’s P&L report for the month showed similar slowing in the improvements in performance U.S. hotels had seen over the summer.

While most hoteliers in Europe, Asia Pacific and other markets have “cause for muffled celebration” as their profitability has slowly returned, the U.S. lags behind, according to HotStats. Along with passing the grim milestone of 200,000 deaths from the virus, the 7-day average for new cases in some states is seeing a spike and there is no sign of the virus relenting.


“It’s certainly still impacting all walks of the hotel industry, from leisure and corporate transient to group and contract business. Like the rest of the global marketplace, U.S. numbers in August remained grim on a year-over-year basis, which is why in the near-term any recovery will be judged on month-to-month movement. Unfortunately, while July was ‘less bad’ compared to the month prior, August was ‘less good’ compared to the month prior,” HotStats said. “It was a roller-coaster month of hotel performance. Though occupancy was up in the month 4 percentage points over July to a still slim 24.8 percent, ADR over the same period was down 1.6 percent, which still led to positive RevPAR of 17.2 percent. Not only did the rooms division flourish, TRevPAR was also up 16.3 percent on the back of a rise in total F&B revenue of 20.5 percent.”

However, while GOPPAR had improved from June to July 72 percent, it shrank 22.5 percent in August. It remained at negative $6.85 compared to negative $5.59 in July. Labor costs rose 27.6 percent per available room and total overheads increased 25 percent.

STR had similar results for the month, with GOPPAR down 91.3 percent from last August to $6.90. TRevPAR shrank 74.5 percent to $55.72, EBITDA PAR was down 112.1 percent to $-6.96, but at the same time labor costs per room were down 64.4 percent to $27.19.

“GOPPAR remained in positive territory for a second straight month, but the incremental improvements we had seen over the previous two months slowed,” said Raquel Ortiz, STR’s assistant director of financial performance. “Even though August produced the industry’s lowest year-over-year demand decline since March, revenue was stagnant. TRevPAR for full-service hotels was only 25 percent of what it was last August, while limited-service properties came in at 38 percent of last year’s value.”

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