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Finance & DevelopmentFinanceU.S. Hotel Profitability Hit Pandemic High in February

U.S. Hotel Profitability Hit Pandemic High in February

BROOMFIELD, Colorado—In February 2021, U.S. hotel gross operating profit per available room (GOPPAR) reached its highest absolute level since February 2020, according to STR’s latest monthly P&L data release.

U.S. Hotel Profitability 

February 2021 vs. February 2020

 

GOPPAR: $17.35 (-83.3%)
TRevPAR: $85.11 (-67.4%)
EBITDA PAR: $0.14 (-99.8%)
LPAR: $34.26 (-60.2%)

GOPPAR had come in no higher than $12.69 for any month since the pandemic’s initial impact on industry performance last March. In addition to improved absolute levels in the profitability metrics, year-over-year comparisons were less steep.

In February 2021, GOPPAR declined 83.3 percent year-over-year (YOY) to $17.35, total revenue per available room (TRevPAR) dropped 67.4 percent to $85.11, earnings before interest, income tax, depreciation, and amortization per available room (EBITDA PAR) fell 99.8 percent YOY to $0.14, and total labor costs per available room (LPAR) decreased 60.2 percent YOY to $34.26.

“Year-over-year percentage changes will turn positive in future P&L data releases due to comparison with pandemic low months last year,” noted Raquel Ortiz, STR’s assistant director of financial performance. “Additionally, the industry’s top-line metrics have been trending at their highest levels in more than a year, as shown in our recent weekly data releases for March, and the uptick should extend to the bottom line as properties generate more room revenue while still maintaining operational efficiencies developed this last year. Roughly 50 percent occupancy is still the general break-even point for turning a profit, but only 44 percent of properties reached positive GOP territory in February—the percentage was lower on a net income level. With most of the demand in the marketplace being leisure-driven, the major markets, most dependent on business and group demand, continue to struggle the most even with some improvement last month.”

 


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