U.S. hotel gross operating profit per available room fell from the previous month, according to STR‘s May 2023 P&L data release.
For the month (Percentage change from May 2022):
- GOPPAR: $83.86 (-2.6 percent)
- Total revenue per available room: $222.78 (+4.1 percent)
- Earnings before interest, income tax, depreciation and amortization per available room: $61.16 (-7.1 percent)
- Labor costs per available room: $72.82 (+13.6 percent)
“Weak revenue growth tied with strong labor costs caused GOPPAR to decline year over year for the first time in 16 months,” Raquel Ortiz, STR’s director of financial performance, said in a statement. “The increase in labor costs was nearly three times that of revenue, but despite this, profit margins continue to rise due to higher total revenues and managing expenses through reduced services, lower employment levels and changes in operation. With summer upon us, we can expect stronger demand and revenue growth that will likely counter some of the expenses seen in late spring.”
Ten of STR's top 25 markets reported GOPPAR levels below May 2022, with Las Vegas showing the lowest index (at 63 percent of 2022 levels).
“While leisure destination Oahu Island surpassed all other major markets in terms of the GOPPAR index, business-centric markets such as Chicago showed strength in the metric,” Ortiz said in a statement. “Group-dependent markets continue to perform well when looking at May year to date, with New York City reporting a GOPPAR index against May 2022 of 231 percent.”