HotStats: Urban and Full-Service Hotels Hit Hard in March

Brooklyn Bridge New York City

LONDON — In March, U.S. hotel gross operating profit per available room (GOPPAR) was down 110.6 percent year-over-year (YOY) to -$12.71. The triple-digit drop was by far the largest percentage decline ever recorded by HotStats since it started charting U.S. data. The previous high was -10.4 percent in March 2015. March 2020 also marked the first time in the HotStats database that the U.S. recorded a negative GOPPAR value.

The decrease in GOPPAR was a result of gaping drops on the revenue side. RevPAR for the month was down 64.4 percent, heavily influenced by a 48.8-percentage-point drop in occupancy to 31.5 percent. The presumption is that April occupancy will suffer even more, as many hotels were still open in early March.

The decline in RevPAR, combined with a more than 65 percent drop in total F&B RevPAR, led to a 62.1 percent decrease in total revenue (TRevPAR)—the greatest decrease since January 2016, when TRevPAR was down 8.2 percent YOY.

As the top-line dried up, expenses in March receded, too, but still ate into the already attenuated revenue. All undistributed expenses came down, while total labor costs on a per-available-room basis were down 21 percent YOY. However, savings in payroll did not match drops in revenue, since many hotels still had to maintain certain levels of staffing, even amid shuttered hotels.


Profit margin for the month turned negative, down 52.8 percentage points to -11.6 percent.

Expectedly, urban markets and big-box full-service hotels were hit harder than properties in secondary and tertiary markets that skew toward select-service.

New York

This was the case in New York City, which has around 16 percent of all confirmed cases in the United States. Occupancy in March hovered around 25 percent, as many hotels shut their doors altogether, including the New York Hilton Midtown, the city’s largest hotel. The precipitous 55.7-percentage-point drop in occupancy grounded RevPAR down 71.5 percent versus the same time a year ago. The prolific rooms RevPAR decrease, coupled with F&B revenue sinking more than 70 percent YOY, led to TRevPAR sinking 68.8 percent YOY.

Expenses across the board were similarly down, including total labor, which decreased 14.5 percent YOY—a percentage that will likely fall farther in April, since many hotels in New York had not furloughed employees until mid-to-late March. Any decrease in expenses had little impact on profit in the face of vast depressed revenue, which dropped GOPPAR 273.8 percent YOY to -$112.7.


Chicago hotel performance data fared similarly to New York. Cook County, which comprises Chicago and is the second-largest county by population in the United States after Los Angeles County, has 31,953 confirmed COVID-19 cases as of April 28. As expected, its hospitality industry was punished in March. RevPAR was down more than 72 percent YOY, as occupancy dropped below 19 percent, coupled with a 5.2 percent YOY drop in rate. TRevPAR remained positive in the month, at $57.92, but was down 68.2 percent YOY.

As revenue dropped, so too did expenses, but at a much less severe pace, illustrated by an 8 percent drop in total overheads on a per-available-room basis. After a February that recorded positive GOPPAR, March turned negative, with a 243.4 percent YOY drop to -$46.73. Profit margin was down almost 100 percentage points to -80.7 percent.


Subscribe to Lodging Daily News for updates.


Previous articleU.S. Hotel Construction Pipeline Held Steady in Q1 Despite COVID-19
Next articleSTR: U.S. Hotel Occupancy at 26 Percent for Week Ending April 25