HotStats has released its "Profit Matters Global Hotel Performance Review 2020," which tracks global hotel industry performance across revenue, expense and profitability metrics.
Not surprisingly, most metrics were down considerably year over year due to the pandemic. Though asset types fared differently, all were affected by a decrease in demand that resulted in a revenue shortfall that ultimately led to a weak bottom line, according to the company.
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One silver lining the review found was a re-examination of all expenses across profit and loss, which led to decreases in both payroll and other departmental costs.
“The extraordinary circumstances brought on by COVID-19 disrupted normal hotel operations, laying waste to hotel profitability worldwide,” said Pablo Alonso, CEO of HotStats. “The pandemic has resulted in a reset, forcing hoteliers to get a better operational grasp across both revenue and cost. Amid the rebound, market context will be the driving force to bring hotel operations back to pre-pandemic levels. The annual 'Profit Matters' report shows the depths from which the industry is climbing out, and where it’s headed—essential information for hoteliers across the globe.”
Key Findings
- Overheads in all departments have seen a large decrease throughout the crisis. Undistributed expenses combined showed a year-over-year decrease of 30 percent to 50 percent, depending on the region. The sales and marketing department was affected the most globally (50 percent–70 percent drop) due, in part, to the marketing fee being linked to hotel revenue.
- Typically, total labor will account for around 35 percent of total revenue. In 2020, amid the dearth of revenue, that number was as much as or more than 50 percent.
- In two surveys conducted by HAMA Europe during the pandemic, members revealed that cash flow and liquidity management topped the priority list. “The art has been finding the right balance between scrutinizing every cent spent and concurrently ensuring that guest services are carefully adapted to the hygiene requirements,” said Theodor Kubak, managing partner at Value One - Arbireo Hospitality Invest and HAMA Europe president emeritus.