GOPPAR for U.S. hotels declines at start of Q4

Hotels in the United States started the fourth quarter of this year experiencing a decline in gross operating profit per available room, according to recently released research from HotStats.

As of October, GOPPAR was down 2.8 percent versus the same month last year, according to the data. Analysts noted that this decline is a symptom of expense creep and a drop in top-line revenue. Overall, year-to-date GOPPAR is down 0.3 percent and has declined 0.7 percent on a rolling 12-month basis.

Revenue per available room for U.S. hotels also was down 2.1 percent to $190.93 during the month, which researchers noted was the result of a 1.8 percent year-over-year dip in average daily rate and an occupancy decline of 0.3 percentage points. Total revenue per available room was also down 0.9 percent to $300.54. The decrease in rooms revenue, along with a decrease in food-and-beverage revenue, led to a negative year-over-year turn in total revenue, which was down 0.9 percent.

Related Story: Does the current U.S. hotel cycle have room to grow?

Not surprisingly, costs continued to be an issue in October. As a percentage of total revenue, labor costs went up 1 percentage point over the same time last year, according to HotStats. On a per-available-room basis, labor costs increased 2.3 percent.

David Eisen, director of hotel intelligence, Americas, HotStats, said the data should put hoteliers on alert as they finish out the end of the year. “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,” he said.

D.C., Houston Score Wins

Washington, D.C., and Houston scored some points during the month, however, thanks to a boost from the World Series, according to HotStats.

In Washington, D.C., RevPAR was up 10.2 percent to $278.83 in comparison to October 2018. That metric was boosted by a 13 percent gain in ADR. Also, even though the market experienced losses in F&B revenue, its TRevPAR has grown 6.4 percent to $407.40, year over year. And although payroll expenses increased 5.2 percent during the month, the city’s hotels saw GOPPAR rise 10 percent.

Related Story: Despite RevPAR growth slowdown, U.S. hotels continue to be built

While the Houston Astros lost the World Series, the city’s hotel market saw some big wins in October when compared to the previous year’s month. Although payroll expenses rose 7.1 percent, GOPPAR increased 2.2 percent. RevPAR was up 3.7 percent to $131.01, and TRevPAR increased 4.2 percent to $203.23.