Los Angeles Hotels Saw High Occupancy Levels in August

Los Angeles

Hotels in Los Angeles performed well compared to the national average hotel performance in the month of August, led by a peak in the number of passengers handled at Los Angeles International Airport (LAX), according to the latest worldwide poll of full-service hotels by HotStats.

Profit per room at Los Angeles hotels reached $91.57 in August. While this is slightly off the region’s peak in June 2018, at $102.12, it is above the year-to-date figure of $91.27. Premium room-occupancy levels in August hit 90.4 percent—a high this year and 1.1 percentage points more than the same period in 2017.

However, hotels’ growth in room occupancy was not sufficient enough to offset the drop in rate, which fell by 1.9 percent to $209.06 and contributed to the 0.7 percent drop in RevPAR to $188.94.

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Furthermore, with demand in August led by the leisure segment, the contribution from non-rooms revenue departments at hotels in Los Angeles fell to just 25.5 percent of total revenue, compared to the year-to-date contribution of 30.7 percent. Despite this, year-on-year growth in non-rooms revenue—which included a 5.4-percent increase in F&B on a per-available-room basis—fueled a 1.2 percent increase in TRevPAR to $253.79.

Yet, GOPPAR levels fell as hotels in Los Angeles continue to suffer the impact of rising costs, which this month were led by the 1.1 percentage-point lift in labor to 36.1 percent of total revenue.

GOPPAR growth at hotels in Los Angeles has stalled some since the positive increase in 2016 (up 10.7 percent), with a decline of 2.0 percent recorded in 2017, and the challenges being faced in 2018 resulting in a year-to-date drop of 0.8 percent.

“Visitor numbers to Los Angeles have been strong in recent years, hitting 48.3 million visitors in 2017, an increase of almost 10 million from the 38.5 million recorded in 2010,” said Pablo Alonso, CEO of HotStats. “However, this does not seem to have directly translated into hotel performance, which may be due to recent increases in Los Angeles’ inventory.”

 

Profit & Loss Key Performance Indicators – Los Angeles 
August 2018 vs. August 2017
RevPAR: -0.7% to $188.94
TRevPAR: +1.2% to $253.79
Payroll: +1.1 pts to 36.1%
GOPPAR: -1.8% to $91.57