HotStats: Hotels end 2021 closer to 'normal'

According to HotStats' full-year 2021 hotel performance data, the global hospitality industry ended the second year of the COVID-19 pandemic almost back to 2019 levels, which the report called “the recognized baseline of recovery.”

“It appears that COVID-19 will not be fully transitory but exist in an endemic state, meaning collectively we will have to live with it, similar to the flu,” said David Eisen, the report’s editor and director of hotel intelligence, Americas, at HotStats. “The more we [get] accustomed to this, the better we will likely be able to get on with our lives and the business of the world. For the hotel industry, the virus has effected a certain resetting of business. Operational costs were stripped down in its wake and one of the things to watch in the recovery is if these expenses creep back. Hoteliers have been adamant that the cost structure has forever changed, but as demand grows, it will be crucial that operators stay the course. Now is the time where the best management companies really show their worth in the ability to drive flow-through and bottom-line success.”


While hotel profits in December 2021 were lower than in December 2019, Q4 was closer to “normal,” with a strong October and slightly weaker December. Hotel profitability in December was higher than November and closer to its December 2019 comparable despite the emergence of the omicron COVID variant. Gross operating profit per available room reached $58.59, 12.5 percent off of the December 2019 level. GOPPAR for full-year 2021 was still 53 percent lower than full-year 2019, but 520 percent higher than full-year 2020.

At the same time, average daily rate was at its highest level since October 2018 and $20 higher on a nominal basis than at the same time in October 2019. The report noted that hoteliers kept their rates steady throughout the year rather than offering discounts in a bid to boost occupancy.

Much of the profit gains can be attributed not to what the report calls a “meteoric” rise in revenue (total December revenue per available room in the U.S. was still approximately $30 off the December 2019 level), but to expense containment. Payroll cost on a per-available-room basis was $16 lower in December than the same month in 2019 but grew “quite dramatically” since the beginning of 2021 to end the year $38 higher. 


While the summer was good for Europe’s hotels, profit performance across the region dropped in the final quarter of the year—consistent with previous Q4s. December GOPPAR was €14, €34 lower than at the same time in 2019. Payroll expense rose during the summer months, but was flat throughout the fourth quarter. Total hotel other expenses followed the same pattern.

The report noted that many European nations are looking to end pandemic restrictions, as Denmark did on Feb. 1., becoming the first European Union country to lift all COVID-19 restrictions despite a surge in omicron. Such moves, according to the report, illustrate a migration toward accepting COVID. 

Middle East

The Expo 2020 in Dubai helped drive profit for the Middle East as a whole. GOPPAR was down for much of the year, but reached “new heights” in October when the Expo launched, according to the report. The event will run through March this year. 

At $97.42, December 2021 GOPPAR in the Middle East was its highest recorded level since March 2018. Large increases in both ADR and occupancy helped propel total revenue at hotels across the region, and the bottom-line success was ultimately cushioned by “flattish” expense growth, including payroll, which only increased 32 percent since the start of the year, “much lower” than other global regions, the report claimed.


Hotels in China reported a large dip in GOPPAR from October to November before recovering somewhat to end the year at $18.41. After a strong end to 2020, China’s full-year 2021 GOPPAR of $22.59 was only 32 percent higher than the previous year. This was in contrast to the global trend, which saw profit gains over 2020 sometimes in triple-digit percentages.

Southeastern Asia fared better, with GOPPAR up to $16.62 in Q4, 658 percent higher than in Q4 2020. Payroll was up around $13 since July, which in part was fueled by a jump in occupancy, which was up 24 percentage points over the same period.