Skip to content

Search

Latest Stories

STR: GOPPAR positive in July, first time since February

Occupancy continues to improve week over week

U.S. HOTEL OCCUPANCY crept above 50 percent in the week ending Aug. 15 and other signs continued to indicate a gradual rise toward recovery for the industry, according to STR’s deep dive into its data for the week. At the same time, hotel gross operating profit per available room also showed positive movement in July, according to STR’s fourth profit and loss analysis.

Occupancy reached 50.2 percent during the week, according to data STR previously released, down 30 percent from last year. ADR for the week finished at $101.41, down 23 percent year over year while RevPAR dropped 46.1 percent to $50.87.


There were 370,000 new COVID-19 cases during the week, said Jan Freitag, STR’s senior vice president of lodging insights, in a video deep dive of the data for the week.

“But you see that the rate of growth for new cases is actually stalling,” Freitag said. “The good news is that the RevPAR percent of change is also getting better week by week by week, it’s inching up.”

The extended-stay sector remains the “golden child’ of the industry, Freitag said.

“Even in the trough on the week ending April 11 the lower rate extended stay sold probably half their rooms,” he said. “Now that number stands at just under 73 percent. For total extended stay we’re selling two out of three rooms, certainly a very, very good performance.”

STR’s new forecast for the year, released last week during its 2020 Hotel Data Conference, is slightly worse, Freitag said. It projects a RevPAR decline of 52.3 percent but rebounding next year to an increase of 37.9 percent.

“This, of course, is a demand story. Demand we expect to be down minus 39 percent this year and up 30 percent again next year,” he said.

ADR is expected to be down 20.9 percent this year, due mostly to a lack of corporate travel especially in the last half of the year, and it will rise to just 5.6 percent growth next year, Freitag said.

“That implies that in [the third and fourth quarter] of next year we’re actually going to see the resurgence of corporate business travel and corporate group travel,” he said. “Let’s see if that holds.”

As he did the week before, Freitag discussed STR’s new methodology for measuring the nation’s room inventory, the Total Room Inventory, which includes rooms that are temporarily closed for the pandemic. According to the standard measure, average occupancy was 47 percent, but in the TRI measurement it was 44.6 percent, a 5.2 percent difference.

Freitag said the math of the model dictates that the difference between the two models must also equal the percent of rooms that were closed, 5.2 percent. Applying that per specific markets, the formula shows the same difference.

“In Oahu, we reported the monthly occupancy standard at 23.3 percent, but when you take into consideration all rooms the occupancy drops to 12.3 percent, implying that 47.5 percent of rooms are actually out of inventory, temporarily closed.”

In its P&L for July, STR reported GOPPAR reached $5.74, the first positive profit amount since February but still down 93.3 percent versus last year. TRevPAR was $60.04, a 74.1 percent decline from last year, while EBITDA PAR stood at negative $9.24, a 115.1 percent drop from last year. Labor costs was $28.46, 64.8 percent drop.

“As the industry inched closer to 50 percent occupancy, we saw continued incremental improvement in the subsequent profitability metrics,” said Raquel Ortiz, STR’s assistant director of financial performance. “We are of course nowhere near pre-pandemic levels, but there were additional encouraging signs in positive GOPPAR for full-service hotels and six major markets.”

More for you

AHLA members meet with U.S. lawmakers to discuss key hospitality legislation impacting hotel owners and workers

AHLA shares priorities with lawmakers

AHLA Members Unite on Capitol Hill to Advance Hospitality Legislation

MORE THAN 250 American Hotel & Lodging Association members met with lawmakers in the U.S. Senate and House to discuss legislative priorities critical to the hospitality industry. They raised concerns about tax and trade policies impacting hotel operating costs and travel demand amid ongoing budget reconciliation and tax negotiations.

Members also discussed expanding and upskilling the hospitality workforce through measures such as adjusting the H-2B visa cap and protecting the franchise model, which supports more than half of all U.S. hotels and 2.8 million jobs, the association said in a statement.

Keep ReadingShow less
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