The US Hotel industry generated profits of $16.7 billion on room revenues of $86 billion and all-time high total revenues of $113.7 billion.
Smith Travel Research (STR), the recognized leader in performance benchmarking for the US hotel industry today released the results of its 2005 HOST (Hotel Operating Statistics) study, based on year-end 2004 results. The US Hotel industry generated profits of $16.7 billion on room revenues of $86 billion and all-time high total revenues of $113.7 billion. The profit in 2004 was 30.5% higher than in 2003, when the industry achieved profits of $12.8 billion. Industry revenue increased 8% from $105.3 billion in 2003. Gross operating profit as a percent of total sales (GOP) increased from 35% in 2003 to 36.6% in 2004.
Randy Smith, co-owner and CEO of STR, commented on this year’s study: “With a RevPAR increase of 7.8% in 2004 hoteliers were able to lessen the impact of higher labor, insurance and fuel costs and built on their strong 2003 results. Of the roughly 1.6 billion roomnights available close to one billion roomnights were sold in 2004 and we expect this strong performance to continue throughout 2005.”
Mark Lomanno, president of STR, added: “Record room revenues and total revenues are indicators that the industry has capitalized well on the resurgence of the business traveler. But industry profits are still below the levels of the year 2000 when GOP reached 40.9% and profits topped $22.5 billion. Hoteliers need to remain vigilant in both their pricing and keeping cost increases under control in a variety of areas, but the increase in GOP shows that this process has already begun.”
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