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GOPPAR at U.S. Hotels Turns Negative After Recent Gains

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GOPPAR at U.S. Hotels Turns Negative After Recent Gains

HotStats

Two consecutive months of profit gain were spoiled as the start of the fourth quarter brought with it a year-over-year downturn in GOPPAR for U.S. hotels.

According to HotStats data, GOPPAR in October was down 2.8% versus the same month last year, a symptom of expense creep and a dive in top-line revenue.

The negative turn comes on the heels of two months of positive YOY profit gains. Year-to-date GOPPAR is down 0.3% and down 0.7% on a rolling 12 months. 

RevPAR for the month was down 2.1% YOY, the result of a 1.8% YOY drop in average room rate and a 0.3-percentage-point dip in occupancy.

The decrease in rooms revenue, along with a decrease in F&B revenue, led to a negative YOY turn in total revenue, down 0.9%.

Costs were equally an issue in October. Labor costs as a percentage of total revenue were up 1.0 percentage points over the same time last year. Labor costs on a PAR basis were up 2.3%.

Meanwhile, undistributed expenses also jumped, including in A&G and Property & Maintenance, up 9.7% and 4.1% YOY, respectively. Utility costs were up 1.6% on a PAR basis.

Profit margin for the month clocked in at 42.2%, down 0.9% from the same period last year.

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

KPI October 2019 v. October 2018
RevPAR -2.1% to $190.93
TRevPAR -0.9% to $300.54
Payroll +2.3% to $98.64
GOPPAR -2.8% to $126.97

“It’s too bad the momentum of the last two months couldn’t continue into October, especially as we move into the holiday season,” said David Eisen, Director of Hotel Intelligence, Americas, HotStats. “December, for instance, is historically one of the slower months of the year in regard to demand, which typically translates into lower revenue and profit. It’s coming into focus that for full-year 2019, profit growth could be flat to down, which should put hoteliers on alert.”

Hosting World Series games helped propel Washington, D.C. and Houston to gains in both revenue and profit, as the Nationals secured the 2019 title in seven games.

In D.C., RevPAR in October was up 10.2% over the same month last year, boosted by a robust 13% uptick in average room rate. And despite YOY losses in F&B revenue, TRevPAR was up 6.4% YOY.

GOPPAR increased 10% over the same period prior. And while total hotel labor costs on a PAR basis increased, the heady increase in revenue resulted in labor costs as a percentage of total revenue coming down in the month 0.3%. Total overhead costs on a PAR basis grew 3.7% YOY.

Profit margin was 49% in the month, up 1.6 percentage points over the same time last year.

Profit & Loss Performance Indicators – Washington, D.C. (in USD)

KPI October 2019 v. October 2018
RevPAR +10.2% to $278.83
TRevPAR +6.4% to $407.40
Payroll +5.2% to $123.75
GOPPAR +10.0% to $199.73

Although Houston lost the series, it, too, showed both revenue and profit gain, although on a slighter basis. RevPAR was up 3.7% in October, aided by growth in both rate (up 1.9%) and occupancy (up 1.3 percentage points).

Total revenue was up 4.2% YOY, aided by overall gains in F&B revenue, which was up 4.7% on a PAR basis.

GOPPAR was up 2.2% in the month as expenses partially ate into revenues. Total overhead costs were up 11.2% on a PAR basis. Utility expenses climbed 13.7% YOY and labor costs on a PAR basis jumped 7.1%.

Profit margin for the month came in at 43.0%, a 0.8-percentage-point drop over the same period last year.

Profit & Loss Performance Indicators – Houston (in USD)

KPI October 2019 v. October 2018
RevPAR +3.7% to $131.01
TRevPAR +4.2% to $203.23
Payroll +7.1% to $57.53
GOPPAR +2.2% to $87.36

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.



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