STR: U.S. Hotel Profitability Improves in October

BROOMFIELD, Colorado—In October 2020, U.S. hotel profitability hit double figures for the first time since February, and year-over-year comparisons improved slightly from the previous month, according to STR’s monthly P&L data release.

In a year-over-year (YOY) comparison with October 2019, the industry reported an 88.3 percent decline in gross operating profit per available room (GOPPAR) to $12.69. The industry’s GOPPAR was in single digits for the previous three months, including a level of $8.14 in September—down 91.7 percent YOY. Previous monthly GOPPAR comparisons came in at -91.3 percent (August), -93.3 percent (July), -105.4 percent (June), and -117.7 percent (May).

In October 2020, total revenue per available room (TRevPAR) dropped 72.2 percent YOY to $70.96, earnings before interest, income tax, depreciation, and amortization per available room (EBITDA PAR) decreased 103.8 percent to -$3.24, and labor costs per available room (LPAR) declined 61.1 percent to $31.28.

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U.S. Hotel Profitability Metrics

October 2020 vs. October 2019

 

GOPPAR: -88.3% to $12.69
TRevPAR: -72.2% to $70.96
EBITDA PAR: -103.8% to -$3.24
LPAR: -61.1% to $31.28

“There were positives in the profitability data even as occupancy flattened and the extension of the summer leisure lift came to an end,” said Audrey Kallman, operations analyst at STR. “GOP margin increased six percentage points from September, and certain location types reported encouraging data—GOPPAR for airport hotels was nearly three times higher than the previous month, and interstate properties drew close to pre-pandemic levels.

“On the negative side, a lack of group business continued to stand out with upper-upscale hotels showing the lowest GOPPAR among the classes,” Kallman continued. “October is usually a strong month for conferences and events, but without those significant demand generators, GOPPAR for upper-upscale properties came in more than $100 lower than this time last year.”

STR October 2020

STR October 2020


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