US hotel profits reached 52% of pre-pandemic level in 2021

Americas News
US hotel profits reached 52% of pre-pandemic level in 2021

A division of the CoStar Group that provides worldwide market data on the hotel industry, STR, has stated in its 2021 profit and loss report that gross operating profit for US hotels reached 52% of the comparable 2019 levels.

Strong demand in both November and December 2021 helped overall profitability levels, with December showing 2021’s highest recovery index in each of the key metrics.

Date GOPPAR TRevPAR EBITDA PAR* LPAR (Labour costs per room)
November US$50.07 US$153.74 US$34.55 US$53.55
December US$46.98 US$154.50 US$29.76 US$56.30
2021 US40.48 US$124.36 US$23.96 US$41.82

 

Raquel Ortiz, assistant director of financial performance at STR, said: “Though the industry still has a way to go on the path to full recovery, a lot of headway was made in 2021. Each passing month we saw revenues and profits continue on a positive, upward trend. Profit margins were relatively strong throughout the year, remaining close to pre-pandemic levels.”

Ortiz added: “Better margins largely stemmed from lower expenses, due to lower demand and a lack of groups and meetings, while other lifts came from cuts in room service, more online customer service, and lower employment levels. Labour costs, which were a large concern even before the pandemic, will continue to put pressure on the bottom line.”

Each of the major markets landed in positive GOPPAR (gross operating profit per available room) territory for 2021, led by popular beach destinations such as Miami and Tampa. Markets that rely heavily on business demand, such as San Francisco and San Mateo, still have more ground to cover in terms of reaching pre-pandemic GOPPAR and TrevPAR (total revenue per available room) levels.

*Earnings before interest, income tax, depreciation, and amortisation

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