The U.S. hotel industry continues to climb back from its pandemic slump thanks to strong demand, resulting in gross operating profit per available room that exceeds pre-pandemic figures, according to the most recent data from hospitality analytics firm STR.
Up 1.6% to $77.37, February’s GOPPAR is the highest it’s been since October 2022. “The profit-and-loss metrics followed typical industry trends, improving from the prior month,” said Raquel Ortiz, STR’s director of financial performance, in a release.
“Both GOPPAR and GOP margins were the highest since last fall, while profit margins came in just one percentage point below 2019. Profit margins for limited-service hotels are further behind in recovery than full service, likely due to increasing labor costs that bear heavier weight on the bottom line.” Total labor costs per available room increased by 2.9% to $73.70, while EBITDA on a per-available-room basis was slightly lower than February 2019, coming in at $51.63, down 0.6%.
Ortiz attributed the increase in GOPPAR to group demand, with “catering and banquet revenues inching closer to 2019 levels.” She added that “on a per-operating-room basis, nearly all F&B revenues outpaced the pre-pandemic comparables.” While meeting space rentals and services charges are already outperforming pre-pandemic numbers, Ortiz noted that February is typically slower for markets that rely on business from groups and conventions, such as Atlanta, San Francisco and Minneapolis.
Meanwhile, Phoenix showed the highest total revenue per available room recovery and the second highest GOPPAR recovery, thanks in part to its role as the host city for Super Bowl LVII. Warm-weather markets Las Vegas and Miami rounded out the top three in terms of TRevPAR.
This supports the projections forecasted in the American Hotel & Lodging Association’s 2023 State of the Hotel Industry Report, which was released in January. It found that 70% of planners surveyed were either booking or actively sourcing new events with RFPs, and 61% said they expected to have larger budgets this year.
Across the pond, London’s February GOPPAR reached $65.55, which was 83% of pre-pandemic numbers. Amsterdam and Berlin’s figures also showed improved profitability but still remained down compared to 2019.
