STR: Profit declines slowed some in May

MAY WAS NOT a profitable month for U.S. hotels, but there was some slowing of the loss, according to STR’s latest profit and loss report. GOPPAR dropped 110.1 percent during the month to negative $10.26, somewhat better than April’s 116.9 percent loss, and limited-service properties showed positive profitability on average after surpassing 45 percent occupancy.

STR’s P&L report found TRevPAR declined 88.3 percent to $28.62, EBIDTA PAR went down 130.9 percent to negative $24.14 while labor costs fell 69.5 percent to $24.30.

“Make no mistake, profits are still down significantly, and in many cases, open hotels are struggling to turn a profit,” said Joseph Rael, STR’s senior director of financial performance. “However, consistent with the occupancy and RevPAR trends shown in our weekly data releases, hotels opened up more in May and saw improved business compared with the previous month. As we have noted, the lower end of the market has seen less severe performance declines throughout the time of the pandemic, and in May specifically, we saw limited-service properties begin to turn a profit when crossing the 45 percent mark in occupancy.”

Among top markets, Phoenix reported the most improvement from April to May with TrevPAR at $18.52, while Los Angeles/Long Beach showed the largest gain in GOPPAR, up to $28.33. Hotels nationwide saw occupancy rise above 40 percent for the first time in weeks, STR previously reported.