Market Report U.S.

U.S. GOPPAR Slips for First Time in 2019

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U.S. GOPPAR Slips for First Time in 2019

HotStats

It was a good run, but it couldn’t last. April was the first month of the year to see a year-over-year decline in profit per room at hotels in the U.S., as a drop across all revenue centers was impacted by rising costs, according to the latest data tracking full-service hotels from HotStats.

GOPPAR fell by 3.7 percent YOY to $118.51. Still, YTD profit per room is positive at 1.6 percent YOY.

The month’s fall was led by a decline in RevPAR, which dropped by 1.6 percent YOY to $179.24, as decreases were suffered in both room occupancy (down 0.6 percentage points) and achieved average room rate (down 0.9 percent).

This marked the first time hotels in the U.S. recorded a monthly YOY decline in achieved average room rate since September 2017.

Further YOY declines were recorded in food/beverage (down 1.3 percent) and conference/banqueting (down 2.1 percent) revenue, on a per-available-room basis.

In line with the decline in rate, a 0.6 percent YOY decrease in TRevPAR to $289.64 signaled the end of a successful run of growth in this measure, which has fallen only once since September 2017.

Payroll levels increased by 3.2 percent YOY to $95.17 on a per-available-room basis—equivalent to 32.9 percent of total revenue. 

Profit & Loss Key Performance Indicators – U.S. (in USD)

April 2019 v. April 2018

RevPAR: -1.6% to $179.24

TRevPAR: -0.6% to $289.64

Payroll: +3.2% to $95.17

GOPPAR: -3.7% to $118.51

“The decline in profit is a blow since the last drop was recorded back in fall 2018,” said David Eisen, director of Hotel Intelligence & Customer Solutions, Americas, HotStats. “However, the hope is that it’s a blip and subsequent months will swing back to positive growth. But with RevPAR down for the month and only narrowly up year-to-date, coupled with an ongoing rise in costs, driving profitability becomes that much more challenging.”

Miami had pronounced difficulty, with GOPPAR off 14.2 percent YOY in April, a likely byproduct of additional room supply that hit the area. Close to 2,500 rooms have opened in Miami-Dade County in the last 12 months.

As a result, room occupancy in the month plunged by 6.3 percentage points to 79.7 percent, which contributed to a 14.3 percent decrease in ancillary revenues.

The drop in profit came in spite of a 4.3 percent saving in payroll to $69.10 on a per-available-room basis.

Profit & Loss Key Performance Indicators – Miami (in USD)

April 2019 v. April 2018

RevPAR: -6.5% to $146.14

TRevPAR: -9.3% to $221.57

Payroll: -4.3% to $69.10

GOPPAR: -14.2% to $87.32

Hotels in Dallas provided a bright spot in a generally sour month of performance across the U.S., recording a 1.1 percent increase in GOPPAR in April to $88.14.

This was the city’s third consecutive month of GOPPAR growth and came despite a 1.0 percent decline in RevPAR, which was primarily due to a 1.4 percentage-point decrease in room occupancy.

The growth in profit was also against a 7.0 percent increase in payroll levels on a per-available-room basis to $59.62.

Profit & Loss Key Performance Indicators – Dallas (in USD)

April 2019 v. April 2018

RevPAR: -1.0% to $130.76

TRevPAR: +3.5% to $207.80

Payroll: +7.0% to $59.62

GOPPAR: +1.1% to $88.14

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