STR: U.S. hotel revenue reaches 50% of 2019's levels

The lack of F&B expenses is allowing profit margins to grow closer to normal, said Raquel Ortiz, STR’s assistant director of financial performance. Photo credit: Clark and Company / GettyImages (A restaurant owner stands in his empty restaurant )

Total revenue for U.S. hotels reached 50 percent of the comparable 2019 level, according to STR‘s March 2021 monthly profit and loss data release. 

Gross operating profit per available room; total revenue per available room; and earnings before interest, income tax, depreciation and amortization per available room came in higher than any month since February 2020: 

  • GOPPAR: $26.79 
  • TRevPAR: $86.61 
  • EBITDA PAR: $12.77 

Labor costs, meanwhile, reached $27.66—60 percent of the figure reported for March 2019. The report noted “hiring difficulties” in the industry.

“We have seen continued improvement in room revenue, but with little coming in from [food-and-beverage] and other departments, industry TrevPAR is not gaining as much steam,” said Raquel Ortiz, STR’s assistant director of financial performance. “At the same time, however, the lack of F&B expenses is allowing profit margins to grow closer to normal. Though other revenues are up compared with recent months, we don’t expect to see a significant boost in those numbers until group demand resurfaces."

Fortunately, not all hotels are struggling, according to Ortiz.

"Hotels with enough demand to achieve occupancy levels above 50 percent have been able to turn a profit. This is especially true for the limited-service segment, where 68 percent of hotels have remained profitable," she said. "These margins are of course at reduced operations in a lot of cases, so some full-service hotels are operating more like limited-service with far less F&B offerings, and some limited-service hotels are operating like extended-stay properties with less daily room cleanings. Overall, profitability is recovering at a slightly quicker pace than anticipated, although the industry has a long way to go.”