STR: U.S. Hotel Profitability Improved in May After April Lows

Revenue gains from April lows

BROOMFIELD, Colo. — STR’s latest monthly P&L data release shows U.S. hotel gross operating profit per available room (GOPPAR) down 110.1 percent in May. That percentage change was a slight improvement from April’s decline of 116.9 percent. Additionally, limited-service properties showed positive profitability on average when surpassing 45 percent occupancy.

U.S. Hotel Performance
May 2020 vs. May 2019

 

GOPPAR: -110.1% to -$10.26
TRevPAR: -88.3% to $28.62
EBIDTA PAR: -130.9% to -$24.14
LPAR: -69.5% to $24.30

In a year-over-year comparison with May 2019, the industry reported a 110.1 percent decline in GOPPAR to -$10.26; an 88.3 percent drop in total revenue per available room (TRevPAR) to $28.62; a 130.9 percent decrease in EBIDTA PAR (earnings before interest, income tax, depreciation, and amortization per available room) to -$24.14; and a 69.5 percent fall in LPAR (total labor costs per available room) to $24.30.

“Make no mistake, profits are still down significantly, and in many cases, open hotels are struggling to turn a profit,” said Joseph Rael, STR’s senior director of financial performance. “However, consistent with the occupancy and RevPAR trends shown in our weekly data releases, hotels opened up more in May and saw improved business compared with the previous month. As we have noted, the lower end of the market has seen less severe performance declines throughout the time of the pandemic, and in May specifically, we saw limited-service properties begin to turn a profit when crossing the 45 percent mark in occupancy.”

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Among top markets, Phoenix reported the most improvement from April to May in TrevPAR ($18.52), while Los Angeles/Long Beach showed the largest gain in GOPPAR ($28.33).

 

 


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