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U.S. hotel profitability growth continues in August

August's profitability remained positive, but the increase was not as dramatic as June to July. Photo credit: Getty/ImagePixel (According to a poll from HotStats, this marks the third consecutive year of gross operating profit per available room growth for the period.)

According to STR‘s latest monthly P&L data, improvements in U.S. hotel profitability metrics slowed in August after July’s gains

Compared to August 2019, the industry reported gross operating profit per available room declines of 91.3 percent to $6.90. Total revenue per available room decreased 74.5 percent to $55.72; while earnings before interest, taxes, depreciation and amortization per available room declined 112.1 percent to -$6.96; and labor costs fell 64.4 percent to $27.19. 

Once the pandemic struck in early spring, the industry registered negative GOPPAR values for four consecutive months: March (-$2.10), April (-$17.98), May (-$10.26) and June (-$5.89). July proved a turning point when GOPPAR turned positive for the first time since February at $5.74. August remained positive, but the increase was not as dramatic as June to July.

“Overall profitability (GOPPAR) remained in positive territory for a second straight month, but the incremental improvements we had seen over the previous two months slowed,” said Raquel Ortiz, STR’s assistant director of financial performance. “Even though August produced the industry’s lowest year-over-year demand decline since March, revenue was stagnant. TRevPAR for full-service hotels was only 25 percent of what it was last August, while limited-service properties came in at 38 percent of last year’s value.”