HotStats: Profitability up in Europe, Middle East and APAC

In a sign for what U.S. hotels might see as COVID-19 numbers improve, Europe, Asia-Pacific and the Middle East all reported positive gross operating profit per available room in August, according to the latest data from HotStats. 

The U.S. is now the only region that has yet to turn a positive month of profit since the COVID-19 pandemic took hold. Meanwhile, China is showing a true V-shaped recovery in profit, having matched December 2019 GOPPAR in August.

“It's encouraging to see most regions getting back to positive profitability—albeit small compared to pre-COVID levels,” said David Eisen, HotStats’ director of hotel intelligence and customer solutions and the author of the report. “Obviously this pandemic has been a global travesty, but if there is one silver lining for the hotel industry, it's that it could result in hoteliers operating more efficient hotels by paying more attention to expenses than they may have otherwise done when times were good.”

But while the numbers for these regions seems positive, hoteliers still need to be cautious: A downturn in leisure travel in fall and early winter is typical under normal circumstances, and with business travel all but halted, this dip could severely hurt occupancy and revenue rates. At the same time, if a second wave drives further restrictions and lockdowns, the industry may be back where it was in the spring.

United States

While the overall U.S. hotel numbers in July were an improvement over June’s, August was down from July. 

U.S. hotel occupancy was up 4 percentage points over July to 24.8 percent, and average rate over the same period was down 1.6 percent, which still led to positive revenue per available room  of 17.2 percent. Not only did the rooms division flourish, but total revenue per available room was also up 16.3 percent on the back of a rise in total F&B revenue of 20.5 percent.

Where the top line succeeded the bottom line failed. GOPPAR had improved 72 percent from June to July, but regressed month-over-month in August 22.5 percent. It remained negative at -$6.85 compared to -$5.59 in July.

Expenses proved a hindrance as labor costs shot up 27.6 percent on per-available-room basis and total overheads increased 25 percent.

Flow-through for August was -17.4 percent.


Europe’s hotels finally posted positive GOPPAR in August after five long months. At €6.37, it was a 282 percent increase over the -€3.50 recorded in July, but still a decrease of 90 percent year over year.

Occupancy gathered steam, up almost 10 percentage points over July, coupled with a €8 hike in average rate. The combination led to RevPAR increasing to $35.44, a 56 percent jump over July.

TRevPAR increased significantly over July, up 48 percent to €54.72 (though still down 69 percent year over year). The stronger top-line growth at last led to positivity on the bottom line. Both labor and overhead costs remained down by a large margin on a year-over-year basis, down 55.8 percent and 47.7 percent, respectively. On a month-over-month basis, both measures were up slightly, but not enough to drop GOPPAR back into negative territory.


The Asia-Pacific region and China in particular have been making strides since April, and August was no exception. Occupancy climbed 6.5 percentage points to close to 50 percent over July, while average rate shot up 8.4 percent, leading to a $10 advance in RevPAR.

The region recorded a strong increase in TRevPAR boosted by gains in food and beverage, which was up 21 percent over the previous month to $29.55 per available room.

GOPPAR continues to track positively, a trend that began in June after May's GOPPAR nadir of -$3.03. The $19.95 reached in August was 69 percent higher than July.

Painting a picture of what other regions’ metrics might look like post-pandemic, China’s August occupancy was only 9 percentage points off from the previous year and the year-over-year deltas for RevPAR, TRevPAR and GOPPAR also are shrinking. In fact, August GOPPAR of $37.19 matched the December 2019 level and was only $6 off from the same time a year ago.

But as profit continues to improve, expenses are coming up, too. Labor costs on a per-available-room basis were up 11 percent in August over July, but still 22 percent down compared to the same time next year. Total overheads rose 11 percent month-over-month. Still, the strong trends coming out of the country are a hopeful bellwether for the rest of the globe.

Middle East

In the Middle East, profitability returned to positive numbers for the first time since the region broke even back in March. At $5.48 per available room, it bested July by a full 221 percent, moving from -$4.50, and showing the first glimmer of hope for the region’s hotels.

In a strong move, average rate jumped $10 over the previous month, helping lead to month-over-month RevPAR growth of 38 percent. Total revenue followed suit, rising to $73.53 per available room, a 31.8 percent increase over the previous month.