U.S. Hotel Industry Proves Resilient in September

Profit-per-room climbed year-over-year in September, with the corporate segment leading RevPAR growth, according to the latest data from HotStats.

The third quarter ended on a high note for U.S. hotels, as September profit-per-room climbed year-over-year (YOY), an indication that the current cycle still has teeth, according to the latest report from HotStats.

Profit & Loss Key Performance Indicators — U.S. Hotels
September 2019 vs. September 2018

RevPAR: +1.1% to $174.72
TRevPAR: +3.3% to $270.99
Payroll: +4.5% to $96.35
GOPPAR: +1.9% to $102.94

GOPPAR increased 1.9 percent in September compared to the same time last year—part of a third quarter that saw profit grow of 0.2 percent, dragged down by a challenging July when GOPPAR decreased 2 percent YOY, according to HotStats data.

A 1.1 percent YOY jump in RevPAR—led wholly by a 1.4 percent increase in average room rate—fueled September’s bottom-line rise. Occupancy for the month was down 0.3 percentage points YOY.

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The corporate segment led RevPAR growth, with a 5.1 percent YOY increase in rate. A 4 percent rise in conference rates also contributed to overall RevPAR punchiness for the month, according to HotStats.

Total revenue increased 3.3 percent in September over the same period last year—a combination of strong growth from the rooms department and positive growth in food and beverage, which rose 6.3 percent on a per-available-room basis. Strong performance from conference and banqueting (up 7.9 percent on a per-available-room basis) also contributed to TRevPAR growth.

While revenue gains proved strong in September, GOPPAR could have ultimately been stronger if not for an overall jump in expenses, according to HotStats. Labor costs on a per-available-room basis increased 4.5 percent in the month over the same period last year, while total overheads increased 4.1 percent on a per-available-room basis. Undistributed expenses played a role in cutting overall hotel profit, including total general and administrative expenses (up 5.4 percent YOY), sales and marketing (up 3.7 percent YOY), and property and maintenance (up 3.7 percent YOY, including a 1.7 percent increase in utility costs).

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