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Full-Service Hotel GOPPAR Levels Hit 2017 High in October

Full-Service Hotel GOPPAR Levels Hit 2017 High in October

Fueled by year-over-year growth across all revenue departments, profit levels at full-service U.S. hotels hit a year high of $135.08 per available room in October 2017, according to the latest worldwide poll of full-service hotels from HotStats. Hotels achieved year-over-year growth in both room occupancy (growth of 2.2 percentage points to 81.3 percent) and average room rate (growth of 1.7 percent to $216.70), contributing to a 4.6 percent increase in RevPAR to a peak of $176.28.

In addition to the growth in RevPAR, the U.S. full-service hotels polled recorded increases in non-rooms revenues, including food and beverage (up 11.2 percent) and conference and banqueting (up 15 percent) on a per available room basis. As a result, year-over-year growth in TrevPAR increased by 6.7 percent to $282.76. The TrevPAR recorded in October was almost $30 above the year-to-date level of $252.97 and also represented a peak for 2017.

Profit & Loss Key Performance Indicators — U.S. Hotels
October 2017 vs. October 2016
RevPAR: +4.6 percent to $176.28
TrevPAR: +6.7 percent to $282.76
Payroll: + 1.2 pts to 31.5 percent
GOPPAR: +9.1 percent to $120.89

Despite cost increases—which included a 1.2 percentage point increase in labor to 31.5 percent of total revenue—profit per room at full-service U.S. hotels increased by 9.1 percent year-over-year to $120.89, equivalent to a profit conversion of 42.8 percent.

“The bumper profit performance in October provided hotels in the United States with some respite from the recent challenging period of operation, with data for the month suggesting that the strong performance was led by an increase in volume and price from the commercial segment,” said Pablo Alonso, CEO of HotStats. “The profit levels recorded this month were more than 25 percent above the performance so far in 2017, and have pushed the year-on-year GOPPAR figure into more positive territory, which will buoy hotel owners and operators in the region.”

Hotels in Washington, D.C., were amongst the best performing full-service properties in the United States in October, recording a 16.5 percent year-over-year increase in profit per room to $192.60, equivalent to a 49.3 percent profit conversion and a 2017 high for hotels in the capital.

In line with the overall U.S. market, HotStats said that the growth was due to an uplift in activity in the commercial segment, which included a 7.1 percent increase in the achieved rate in the residential conference segment to $355.97, as well as a 6.7 percent increase in volume in the corporate segment to 33.4 percent of all room nights sold during the month.

The strong demand from the commercial segment in October enabled RevPAR levels at hotels in Washington, D.C., to reach a 2017 high at $269.01, with increases recorded in both room occupancy (up 4.4 percentage points to 90.6 percent) and achieved average room rate (up 5.2percent to $296.82).

Profit & Loss Key Performance Indicators – Washington, D.C. Hotels
October 2017 vs. October 2016
RevPAR: +10.6 percent to $269.01
TrevPAR: +9.7 percent to $390.75
Payroll: +0.1 pts to 30.0 percent
GOPPAR: +16.5 percent to $192.60

“Amongst the business activity in Washington, D.C., in October was the Annual Meeting of the Board of Governors of the World Bank Group and the International Monetary Fund. This year, the high-profile meeting was attended by 4,000 member-country delegates, 650 observer organization representatives, 900 members of the press, and 550 accredited civil society members,” Alonso explained. “Little wonder that hotels in the capital were able to record such premium performance levels this month.”

Hotels in Portland, Ore., were also among those to achieve strong profit growth in October, recording a 15.1 percent year-over-year increase in GOPPAR to $147.29. The recorded 4.2 percent increase in RevPAR to $188.54 was primarily driven by room occupancy, which increased by 4.4 percentage points to 90.3 percent and offset the 0.9 percent decline in achieved average room rate to $208.71.

The uplift in volume fueled the utilization of ancillary facilities, enabling an increase in non-rooms revenues, including food and beverage (up 50.5 percent) and conference and banqueting (up 71.1 percent). This contributed to a year-over-year increase in non-rooms revenues of $36.26 per available room, which far outpaced the growth in pure rooms revenue, at just $7.62.

The significant contribution from all revenue departments meant that hotels in Portland recorded a 16.9 percent year-over-year increase in TrevPAR to $303.67.

Profit & Loss Key Performance Indicators – Portland, Ore.
October 2017 vs. October 2016
RevPAR: +4.2 percent to $188.54
TrevPAR: +16.9 percent to $303.67
Payroll: +1.1 pts to 28.0 percent
GOPPAR: +15.1 percent to $147.29

Profit performance at hotels in Portland increased by 15.1 percent year-over-year to $147.29. However, the positive profit performance this month was not sufficient to offset the year-to-date decline and, at $111.78, GOPPAR at hotels in Portland remains 2.2 percent behind the same period last year for the 10 months to October 2017.

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