Gross operating profit for U.S. hotels reached 70 percent of the comparable 2019 level, according to STR‘s May 2021 monthly profit and loss data release. While demand, revenues and GOP continue to uptick, labor spending remained flat from the previous month at 64 percent.
Each of the key profitability metrics, on a per-available-room basis, came in higher than any month since February 2020 except for labor.
- GOPPAR: $37.30
- Total revenue per available room: $102.52
- Earnings before interest, income tax, depreciation and amortization per available room: $22.54
- Total labor costs per available room: $30.96
“May was another step forward as more economic reopening and more demand pushed industrywide profitability further upward,” said Raquel Ortiz, STR’s assistant director of financial performance. “Overall, 95 percent of hotels broke even on a GOP basis, while 73 percent broke even on a net income basis. For context, those percentages were 98 percent and 85 percent in May 2019, so while the improvement is encouraging, many hotels are still experiencing financial difficulty, and even more are seeing staffing issues as evidenced by the stagnant rate of labor costs.
“Many of the properties still experiencing significant struggles are those in the major metros. Those markets finally each reached positive GOPPAR territory, with the warm weather and beach markets like Miami, Phoenix, L.A. and San Diego performing the best.”