Several regions around the world are showing signs of sustained performance positivity, according to the latest monthly global hotel performance data from HotStats.
“The collective hotel industry is relieved that 2020 is in the books, but it doesn't mean that 2021 will automatically be better,” said David Eisen, HotStats’ director of hotel intelligence and customer solutions. “However, the ramp-up and rollout of vaccines, in tandem with relaxed restrictions in some areas, should spur demand. Still, until companies decide it's okay to put their employees back on the road, meetings convene and conferences floor, the hotel industry will continue to have a revenue problem that will have to be blunted by expense control.”
Highlights from HotStat's January report:
U.S.
Gross operating profit per available room in U.S. hotels continues to hover around the break-even mark, with January recorded at -$1.81, a 102.5 percent year-over-year decrease. Since March 2020, the U.S. has recorded 10 months of negative GOPPAR, with October reaching a high mark of $4.98.
Occupancy has been in the 20 percent range, and despite relative rate progression, this has kept revenue per available room at around the same level it’s been since August, according to HotStats. Like RevPAR, total revenue per available room remains stuck in neutral, not varying much from August. At $55.30 in January, it was down 77.7 percent year over year, the result of stunted ancillary revenue.
Labor expense has not improved significantly since it dropped in April due to closures, reduced occupancy and increased pressure on management spend. Labor costs have been “rather steady” since October and down 69 percent year over year in January to $31.76 on a per-available-room basis.
As in previous months, all operated and undistributed expenses were down year over year, including utilities, which were down 28.1 percent year over year.
Profit margin in January was slightly negative at -3.3 percent, a 32.8-percentage-point decrease over the same time a year ago.
Europe
Continued lockdowns and restrictions across Europe have impeded hotel performance, and new strains and new measures could make things worse. European Union leaders are expected to announce further restrictions on nonessential travel, which would hinder recovery for the region’s hotels.
GOPPAR across Europe in January decreased its most on a year-over-year basis since the start of the pandemic, dropping 144.9 percent to €-13.06, the lowest recorded number since June. As such, profit margin fell to -70.3 percent, a 92.3-percentage-point drop over the same time a year ago.
The report blames this fall in profit on a “dearth in revenue.” Occupancy in January was a meager 12.9 percent, 49.9 percentage points lower than at the same time last year and the lowest recorded since June’s 8.6 percent. RevPAR in the month was down 86.8 percent year over year to €11.31 and TRevPAR was down 85.9 percent to €18.58.
This drove a decrease in expenses, with both labor and overheads down more than 50 percent year over year.
APAC
The Asia-Pacific region reported GOPPAR of $5.48 in January—and while this is at least a positive number, it is also the lowest recorded since June and 88.1 percent off from the same time year ago. (year over year comps will shrink as 2021 unfolds based off when each region swooned due to COVID.)
“APAC’s relative success compared to other global regions in containing the spread of COVID-19 has, and continues to have, a positive impact on domestic travel and, by extension, its hotel industry,” the report claimed.
Occupancy in the region receded in January to 35.4 percent, leading to RevPAR of $39.21, 55 percent down from the previous year. Different segments also performed well, given the operating environment, according to HotStats. For example, conference volume mix percentage, at 22.4 percent, was even year over year. Even better, corporate volume mix percentage was up 7.8 percentage points to 22.7 percent. The report suggests these numbers illustrate a willingness by the traveling public to get back to some semblance of everyday normalcy.
Total revenue reached $75.10, 52.8 percent down from the same time last year, as ancillary revenue continued to lag. Meanwhile, costs continue to stay down, such as labor, which has leveled off since October, and down 31.4 percent year over year.
At 7.3 percent, profit margin was positive, but down almost 20 percentage points from the month previous and 21.6 percentage points from the same time a year ago.
Middle East
The Middle East has now recorded six straight months of profit positivity. GOPPAR in January was recorded at $37.30, close to December’s $38.74, which was the highest the region has attained since February 2020.
January RevPAR was, like GOPPAR, similar to December, but at $71.40 was still down 41.9 percent year over year. And while occupancy was down a couple percentage points from December, average rate of $171.01 was 2.6 percent higher than at the same time last year.
Expenses in the month stayed muted. Total labor costs were down 29.2 percent year over year, while total overheads were down 25.3 percent, both on a per-available-room basis.