PROFITS WERE ON the slide for U.S. hotels in November, dropping 5.2 percent over the same month last year, according to HotStats. That’s the biggest decline seen so far in 2018, though December’s numbers have yet to come in.
November was the third month from last year that saw similar drops in profit, HotStats reported. In January profits declined 0.5 percent while in July they fell 2.2 percent compared to the previous year.
RevPAR for November stood at $150.58, down 0.7 percent, while Gross Operating Profit Per Available Room dropped 5.2 percent to $84.26. GOPPAR also was down one-third from its level in October of $126.34.
Rising costs of labor (up 1.4 percent to 37.1 percent of total revenue) and overheads (up 0.7 percent to 23.8 percent of total revenue) cut into profits for the month. That left profits at 33.9 percent of total revenue, down from the year-to-date figure of 38.2 percent.
Revenue also was down 0.7 percent for rooms, 1.9 percent for F&B and 3.9 percent for conferencing and banqueting. At the same time, while average room rates grew 5.7 percent over the last two years to $208.29, occupancy dropped 1.4 percent over the same time to 73.6 percent.
“While November isn’t historically as strong as September or October, it is normally a pretty positive month for hotels in the U.S.; however, softening toward the end of the year will no doubt re-center the conversation on cost creep, principally in labor expense,” said HotStats Director of Hotel Intelligence and Customer Solutions David Eisen.