HotStats

U.S. hotels eked out a 0.6% year-over-year increase in GOPPAR in January, but as the full scope of the coronavirus virus becomes clearer, subsequent months could put pressure on hoteliers to generate both top- and bottom-line growth.

Revenue, too, was up in the month, as rooms RevPAR grew 2.7% YOY on the back of an increase in average rate (up 1.1% YOY) and occupancy (up 1.0 percentage points). Positive revenue growth in F&B pushed total revenue to a 3.2% YOY increase, as non-rooms revenue grew 3.9% YOY.

Still, hoteliers had trouble with flow-through, evidenced by the smaller increase in profit of only 0.6%. This came as a result of a jump in expenses, led by a 5.3% YOY increase in total labor costs on a per-available room basis, which raised its percentage of total revenue by 0.8 percentage points to 40.8%. In the Rooms department, total costs in the month moved 4.5% higher than the previous year.

Hoteliers had difficulty keeping undistributed expenses down. On a per-available-room basis, A&G costs were up 6.5% YOY, I&T costs were up 3.7% YOY and Sales & Marketing costs were up 6.1% YOY. Property & Maintenance costs were the only ones to come down, at 0.5% YOY, inclusive of a 3.7% YOY decrease in utilities.

The sharp expense growth led to profit margin sinking 0.8 percentage points in the month to 28.9%.

Profit & Loss Performance Indicators – Total U.S. (in USD)

KPI

January 2020 v. January 2019

RevPAR

+2.7% to $143.38

TRevPAR

+3.2% to $234.19

Payroll

+5.3% to $95.51

GOPPAR

+0.6% to $67.79

While the news was at least positive for the total U.S. in January, the same can’t be said for New York. A city that is already negatively impacted from oversupply will now contend with the likely reduction in the number of foreign travelers, especially Chinese, due to fear and travel restrictions brought about by the coronavirus.

This has the potential to take a large bite out of the Big Apple: foreign visitors, both for business and leisure, spend much more on average than domestic travelers, reports show, with Chinese travelers spending the most on a per-person basis, according to NYC & Co., the city’s tourism and marketing arm. And if occupancy does plummet in the coming months, it could exacerbate what is already a struggling performance for its hotel industry.

In January, revenue wasn’t the issue. It’s the bottom-line where hoteliers felt the sting. Rooms RevPAR was only up slightly YOY, at 0.3%, while TRevPAR increased 1.7% YOY on the back of stronger F&B returns.

More alarming is the fact that hoteliers actually lost money in the month. GOPPAR came in at -$22.93 for January, which is 14.7% more negative than the same time a year prior when GOPPAR was -$19.99. Profit margin was down 1.1 points to -9.3%. Any revenue from the top line was gobbled up by expenses, including labor costs, which jumped 3.5% YOY. Rooms expenses jumped 3.7% YOY, while undistributed expenses were up, too, including A&G, at 4.1% YOY, on a per-available-room basis.

Profit & Loss Performance Indicators – New York (in USD)

KPI

January 2020 v. January 2019

RevPAR

+0.3% to $169.27

TRevPAR

+1.7% to $246.62

Payroll

+3.5% to $187.52

GOPPAR

-14.7% to -$22.93

Houston, on the other hand, had no issue generating hotel profit in January. GOPPAR grew 10.4% YOY as rooms RevPAR shot up 11.8% with gains in both occupancy (up 3.8 percentage points) and average room rate (up 5.2%).

Total revenue climbed 8.9% YOY, as non-rooms revenue increased 4.4% YOY.

On the expense side of the ledger, labor costs moved up 8.1% YOY on a per-available-room basis, but the strong growth in revenue resulted in labor cost as a percentage of total revenue actually coming down 0.2 percentage points to 33.9%. Total expenses on a per-occupied-room basis were up 0.3% YOY.

The strong growth in revenue led to profit margin rising 0.5 percentage points to 35.4%.

Profit & Loss Performance Indicators – Houston (in USD)

KPI

January 2020 v. January 2019

RevPAR

+11.8% to $112.15

TRevPAR

+8.9% to $178.36

Payroll

+8.1% to $60.38

GOPPAR

+10.4% to $63.05

About HotStats

HotStats provides a unique profit-and-loss benchmarking service to hoteliers from across the globe that enables monthly comparison of hotels’ performance against competitors. It is distinguished by the fact that it maintains in excess of 500 key performance metrics covering 70 areas of hotel revenue, cost, profit and statistics, providing far deeper insight into the hotel operation than any other tool. The HotStats database totals millions of hotel rooms worldwide. For more information, visit www.hotstats.com. To request a demo of the HotStats platform, please click here.

Logos, product and company names mentioned are the property of their respective owners.

You May Also Like

Fighting workplace burnout in the hospitality industry

Burnout is a health hazard in the workplace and hospitality is more…

Hospitality workwear

Positive Branding is an established workwear provider with a huge clothing range…

U.S. Hotel F&B Performance Increased in 2018

U.S. hotel food-and-beverage revenue per occupied room (F&B RevPOR) increased 2.7% in…

Bennett Hay celebrates a year a success with Guest First Awards 2019

Bennett Hay, the bespoke hospitality company has marked another successful year with…