Business Travel Boosts U.S. Hotels’ Profit Per Room in September

Key Performance Indicators

September 2018 vs. September 2017

RevPAR: +0.6 percent to $158.72
TRevPAR: +3.4 percent to $252.30
Payroll: -0.3 pts to 35.1 percent
GOPPAR: +5.9 percent to $95.66

A bump in corporate travel at the end of the third quarter proved enough to boost GOPPAR and serve as a harbinger of continued strength in the hotel industry as it moves into the fourth quarter. Profit per room at U.S. hotels in September was more than $20 above the GOPPAR recorded in August, according to the latest data tracking full-service hotels from HotStats.

“While the summer was a relatively successful period of operation, owners and operators will be glad to see a return to more robust levels of performance and a busy fall period to support the profit growth recorded so far in 2018,” said David Eisen, director of Hotel Intelligence & Customer Solutions at HotStats.

On a year-over-year basis, hotels recorded a 5.9 percent increase in profit per room, driven by growth in revenue across all departments—particularly food and beverage, which was up 7.6 percent on a per-available-room basis. As a result of the contribution from non-rooms revenue, TRevPAR at U.S. hotels was $252.30 in September—3.4 percent above the same period in 2017.

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A drop in labor costs further buoyed growth in TRevPAR. Labor costs fell 0.3 percentage points below the same period in 2017, accounting for 35.1 percent of total revenue in September. As a result of the movement in revenue and costs in September, the profit margin at U.S. hotels hit 37.9 percent of total revenue.

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