Fragile U.S. Hotel Industry Records Monthly Performance Gains


Source: Hospitality Net

June 29, 2020

April showers just may have been the thing hoteliers in the U.S. needed. Though May wasn’t a full bouquet of flowers, green shoots certainly abounded.

In the U.S., between April and May, total revenue per available room (TRevPAR) was up 39% (down 92% year-over-year) and gross operating profit per available room (GOPPAR) was up 32% to $-17.25 (down 116.2% YOY).

The uptrend is a sign that April may have been the bottom and absent a surge in cases, which is a possibility, the expectation is that month-over-month (MOM) numbers will continue to improve, especially as more states move into Phase Two, which allows for non-essential travel to commence and sets out certain guidelines, like these, should hotels decide to reopen.

Occupancy and room rate in May remained well off 2019 levels, but did climb 4 percentage points and 5%, respectively, from April, helped out in some way by Memorial Day Weekend travel, which, while much lower than the 43 million Americans who took a trip last year, according to AAA, was an added boost. May RevPAR of $13.76 (down 92.2% YOY) was up 54% from April and down 79% from RevPAR of $66.27 in March, the first month that COVID-19 impact showed up in hotel industry performance numbers.

Further and expected YOY expense drops showed up in the data, as many hotels remained closed or operated at limited capacity. Labor costs on a per-available-room basis were down 74.4% YOY, while utility costs were down 45% YOY. Anecdotally, the expectation is that water bills will rise due to increased laundry operations and additional and more frequent washing of things like linens due to cleaning protocols. One hotelier told HotStats that his water bill was already up 33%.

Profit margin was -87.3% of total revenue, up 93 percentage points from April, but down 125 percentage points from the same time a year ago.

Read the full article here.


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