U.S. Hotels
Profit & Loss Performance Indicators
October 2019 vs. October 2018RevPAR: -2.1% to $190.93
TRevPAR: -0.9% to $300.54
Payroll: +2.3% to $98.64
GOPPAR: -2.8% to $126.97
Two consecutive months of profit gain in August and September were spoiled at the start of the fourth quarter, which began with a year-over-year (YOY) downturn in GOPPAR for U.S. hotels. According to HotStats data, GOPPAR in October 2019 declined 2.8 percent versus the same month last year, a symptom of expense creep and a dive in top-line revenue.
The negative turn comes on the heels of two months of positive YOY profit gains. Year-to-date GOPPAR is down 0.3 percent and down 0.7 percent on a rolling 12 months basis.
RevPAR for October 2019 declined 2.1 percent YOY, the result of a 1.8 percent YOY drop in average room rate and a 0.3-percentage-point dip in occupancy. The decrease in rooms revenue, along with a decrease in food and beverage revenue, led to a negative YOY turn in total revenue—down 0.9 percent.
Costs were equally an issue in October 2019. Labor costs as a percentage of total revenue rose 1 percentage point over the same time last year. Labor costs on a per-available-room basis increased 2.3 percent. Meanwhile, undistributed expenses also jumped, including general and administrative expenses and property and maintenance expenses—up 9.7 percent and 4.1 percent YOY, respectively. Utility costs inclined 1.6 percent on a per-available-room basis.
Profit margin for October 2019 clocked in at 42.2 percent, down 0.9 percent from the same period last year.
“It’s too bad the momentum of the last two months couldn’t continue into October, especially as we move into the holiday season,” said David Eisen, director of Hotel Intelligence, Americas, HotStats. “December, for instance, is historically one of the slower months of the year in regard to demand, which typically translates into lower revenue and profit. It’s coming into focus that for full-year 2019, profit growth could be flat to down, which should put hoteliers on alert.”
Washington, D.C. Market Performance — October 2019
Washington, D.C. Hotels
Profit & Loss Performance Indicators
October 2019 vs. October 2018RevPAR: +10.2% to $278.83
TRevPAR: +6.4% to $407.40
Payroll: +5.2% to $123.75
GOPPAR: +10.0% to $199.73
Hosting World Series games helped propel Washington, D.C. and Houston hotels to gains in both revenue and profit, as the Nationals secured the 2019 title in seven games.
In D.C., October 2019 RevPAR increased 10.2 percent over the same month last year, boosted by a robust 13 percent uptick in average room rate. And despite YOY losses in food and beverage revenue, TRevPAR rose 6.4 percent YOY.
GOPPAR increased 10 percent over the same period prior for Washington, D.C. hotels in October 2019. While total hotel labor costs on a per-available-room basis increased, the heady increase in revenue resulted in labor costs declining 0.3 percent as a percentage of total revenue. Total overhead costs on a per-available-room basis grew 3.7 percent YOY. Profit margin for D.C. hotels in October increased 1.6 percentage points YOY to 49 percent.
Houston Market Performance — October 2019
Houston Hotels
Profit & Loss Performance Indicators
October 2019 vs. October 2018RevPAR: +3.7% to $131.01
TRevPAR: +4.2% to $203.23
Payroll: +7.1% to $57.53
GOPPAR: +2.2% to $87.36
Although Houston lost the series, it, too, showed both revenue and profit gain in October 2019, although on a slighter basis. RevPAR increased 3.7 percent, aided by growth in both rate (up 1.9 percent) and occupancy (up 1.3 percentage points).
Total revenue for Houston Hotels in October rose 4.2 percent YOY, aided by overall gains in food and beverage revenue, which increased 4.7 percent on a per-available-room basis. GOPPAR inclined 2.2 percent as expenses partially ate into revenues. Total overhead costs rose up 11.2 percent on a per-available-room basis. Utility expenses climbed 13.7 percent YOY and labor costs on a per-available-room basis jumped 7.1 percent. Profit margin for the month came in at 43 percent—a 0.8-percentage-point drop over the same period last year.
