Market Report U.S.

GOPPAR Bounces Back, But Cost Concerns Remain at U.S. Hotels

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GOPPAR Bounces Back, But Cost Concerns Remain at U.S. Hotels

HotStats

After a negative turn in April, profit per room at U.S. hotels bounced back in May, increasing by 2.0% year-over-year, buoyed by growth across all revenue centers, according to the latest data from HotStats.

GOPPAR was recorded at $112.80 in May, and while this was 4.7% above the year-to-date GOPPAR figure at $107.73, it was almost $6 below the profit level in April at $118.51.

This was a function of demand, albeit a significant acceleration in costs was recorded in May, including a 4.7% YOY increase in payroll to $97.49, on a per-available-room basis.

It was a positive month of revenue growth across all departments, with YOY revenue increases recorded in food/beverage (up 3.5%) and conference/banqueting (up 2.4%), on a per-available-room basis.

This was supported by a 2.0% increase in RevPAR, as hotels in the U.S. successfully resumed growth in achieved average room rate, following a decline in April, increasing by 1.5% in the month to $215.22. This was led by growth in rate in the corporate (up 1.3%) and residential conference (up 2.1%) segments. 

Growth across rooms and non-rooms departments contributed to the 3.4% YOY increase in TRevPAR to $283.54.

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

KPI

May 2019 v. 2018

RevPAR

+2.0% to $172.24

TRevPAR

+3.4% to $283.54

Payroll

+4.7% to $97.49

GOPPAR

+2.0% to $112.80

“Despite resuming growth in revenue this month, hoteliers in the U.S. are reminded to keep an eye on creeping costs and their impact on profit,” said David Eisen, Director of Hotel Intelligence & Customer Solutions, Americas, at HotStats. “Payroll, for one, continues to be a thorny issue that hoteliers need to stay vigilant on.” 

This threat to profit is no better illustrated than in San Francisco, where a 4.2% YOY increase in TRevPAR to $355.83 was effectively eradicated by escalating expenses, like payroll, which was up 9.3% YOY to $147.77 on a per-available-room basis, and equivalent to 41.5% of total revenue. 

After a challenging period of operation in recent years, growth in TRevPAR in the Bay City has accelerated in the last six months, but this has not necessarily flowed through to the bottom line.

Profit & Loss Key Performance Indicators – San Francisco (in USD)

KPI

May 2019 v. May 2018

RevPAR

+5.7% to $259.32

TRevPAR

+4.2% to $355.83

Payroll

+9.3% to $147.77

GOPPAR

-1.6% to $129.37 

It was a similar story down the coast in Los Angeles, as hotels there suffered a 4.7% drop in GOPPAR to $81.66.

This was the third consecutive month of heavy profit decline, as payroll levels increased by 5.4% YOY to $102.47 and overheads grew by 5.7% to $58.32, on a per-available-room basis.

The uptick in labor canceled out the 1.4% increase in TRevPAR, which came despite an uneven performance in the non-rooms departments.

It was on the back of a 0.7% YOY increase in RevPAR to $168.33, which came despite a seventh consecutive month of decline in achieved average room rate.

Profit & Loss Key Performance Indicators – Los Angeles (in USD)

KPI

May 2019 v. May 2018

RevPAR

+0.7% to $168.33

TRevPAR

+1.4% to $253.09

Payroll

+5.4% to $102.47

GOPPAR

-4.7% to $81.66

 

HotStats provides two reporting tools to hoteliers:

Our unique profit and loss benchmarking service which enables monthly comparison of hotels’ performance against their competitors. It is distinguished by the fact that it provides in excess of 100 performance metric comparisons covering 70 areas of hotel revenue, cost, profit and statistics providing far deeper insight into the hotel operation than any other tool.

Our latest innovation in daily revenue intelligence, MORSE. Amongst its reporting are daily and highly granular market segmentation metrics as well as distribution channel and source of booking analysis. It takes daily market intelligence to a whole new level.

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