Illustrating that revenue per available room and profit don’t always move lock and step, RevPAR at U.S. hotels in June declined year-over-year, but the drag did not bring down GOPPAR with it, according to the latest data tracking full-service hotels from HotStats.
The result: RevPAR decreased 0.5% YOY to $175.14, while GOPPAR was up 0.9% to $113.10.
Declining room occupancy, down 1.1 percentage points, was the likely culprit as achieved average room rate was up 0.8% YOY.
Where, then, was the growth derived? Hotels in the U.S. found salvation in a 2.0% YOY increase in ancillary revenues, which grew to $101.89 per available room, and were led by an increase in Food & Beverage (up 0.9%) and Conference & Banqueting (up 1.1%) revenue, on a per-available-room basis.
As a result, TRevPAR at hotels in the U.S. increased by 0.4% this month to $277.03, contributing to the ongoing upward trajectory in this measure.
And although hotels in the U.S. endured a month of increased labor costs, which increased by 1.6% in the month to $92.09 per available room, they were able to record a fifth month of YOY growth in profit for 2019.
The 0.9% YOY growth in GOPPAR contributed to the 1.7% increase for YTD 2019.
Profit & Loss Key Performance Indicators – U.S. (in USD)
“June was a classic case of room revenue not dictating overall profitability, demonstrating how other revenue streams cannot be overlooked,” said David Eisen, Director of Hotel Intelligence & Customer Solutions, Americas, at HotStats. “Beyond that, a 17.1% YOY drop in rooms cost of sales showed how hoteliers are further gaining a foothold against online travel agencies.”
Not every U.S. city had a banner June. GOPPAR at hotels in Houston declined 12.6% YOY to $53.01.
The drop was on the back of a 9.2% drop in RevPAR as room occupancy fell by 7.8 percentage points YOY to 66.7%. Oversupply is a likely culprit, as there are about 20,000 new rooms in the market since 2010.
As a consequence, ancillary revenues at hotels in Houston fell by 8.2% YOY to $43.71 per available room, equivalent to 30.9% of total revenue.
Although hotels in Houston did all they could to cut costs, which included a 6.3% YOY reduction in labor, it was not enough to prevent a fifth month of YOY profit decline in 2019.
Profit & Loss Key Performance Indicators – Houston (in USD)
North, in Dallas, it was a different story. GOPPAR was up 19.5% YOY, leveraged off growth across all revenue centers, as well as cost savings.
In addition to a 3.9% YOY increase in RevPAR, a strong showing in ancillary revenue growth contributed to the 6.1% uplift in TRevPAR to $172.13.
Contributions from ancillary revenues included a 9.1% increase in Food & Beverage revenue and a 12.0% uplift in Conference & Banqueting revenue, on a per-available-room basis.
The Dallas market overall has recorded a 2.7% YOY increase in profit per room for YTD 2019.
Profit & Loss Key Performance Indicators – Dallas (in USD)
HotStats provides a unique profit-and-loss benchmarking service to hoteliers from across the globe that enables monthly comparison of hotels’ performance against competitors. It is distinguished by the fact that it maintains in excess of 500 key performance metrics covering 70 areas of hotel revenue, cost, profit and statistics, providing far deeper insight into the hotel operation than any other tool. The HotStats database totals millions of hotel rooms worldwide. For more information, visit www.hotstats.com.