Despite recording an increase in revenue across a number of departments, year-on-year profit per room…
January 3, 2018 2:29 pm
Hotels in the USA recorded a 5.3-percent increase in GOPPAR this month, which was in spite of an uplift in costs, which included a 9.5-percent increase in Labor, according to the latest worldwide poll of full-service hotels from HotStats.
The year-on-year increase in RevPAR at hotels in the USA was steady this month, with growth recorded in both room occupancy (+1.3-percentage points), to 74.8-percent, as well as achieved average room rate (+1.7-percent), to $201.52.
Increases in Non-Rooms Revenues, which included Food and Beverage (+3.7-percent) and Conference and Banqueting (+4.0-percent), in addition to the 3.5-percent increase in Rooms Revenue, contributed to the 4.1-percent year-on-year increase in TrevPAR, to $246.81.
Although the year-on-year growth painted a positive picture of performance this month, TrevPAR levels were approximately $36 behind the performance in October, further highlighting that month’s stand-out performance, but were also 2.3-percent behind the year-to-date performance for hotels in the USA, at $252.42.
Profit & Loss Key Performance Indicators – USA (in USD)
November 2017 v November 2016
RevPAR: +3.5% to $150.76
TrevPAR: +4.1% to $246.81
Payroll: + 1.8 pts to 35.8%
GOPPAR: +5.3% to $87.68
Whilst Payroll levels continued their upward trajectory this month, recording a 1.8-percentage point year-on-year increase to 35.8-percent of total revenue, this was outweighed by the comfortable top line growth and enabled hotels in the USA to record a profit per room increase of 5.3-percent to $87.68. This was equivalent to a profit conversion of 35.5-percent.
The growth in profit this month was also in spite of a 2.3-percent year-on-year increase in ‘Overhead’ costs, including Sales & Marketing (+3.7-percent) and Utilities (+8.3-percent), on a per available room basis.
“November is always a challenging month of trading for hotels in the USA due to the timing of Thanksgiving and many people taking vacation time to spend with family around this period. Despite this, hotels in the USA have managed to maintain their upward trajectory to good effect this month.
With a steady increase in top and bottom line performance so far in 2017, hotels in the USA are on target for a third consecutive year of profit growth,” said Pablo Alonso, CEO of HotStats.
One of the stand-out performances this month was in San Francisco, as hotels recorded a 20.4-percent year-on-year increase in GOPPAR to $96.41, which was primarily as a result of accommodation demand generated by the 2017 Dreamforce conference.
Profit & Loss Key Performance Indicators – San Francisco (in USD)
November 2017 v November 2016
RevPAR: +9.8% to $216.73
TrevPAR: +8.2% to $299.05
Payroll: +1.0 pts to 43.2%
GOPPAR: +20.4% to $96.41
Whilst hotels in San Francisco suffered a 3.4-percentage point drop in room occupancy this month, to 80.1-percent, this was more than offset by the 14.4-percent increase in achieved average room rate, to $270.59, which helped drive a 9.8-percent increase in RevPAR, to $216.33.
Rate growth was achieved across most segments in November, with the greatest margin of increase recorded in the Best Available Rate (+24.7-percent), Residential Conference (+20.4-percent) and Leisure (+11.4-percent) segments.
In addition to the growth in RevPAR, increases were also recorded in Food and Beverage (+5.9-percent) and Conference and Banqueting (+5.3-percent) revenues on a per available room basis, which helped fuel the 8.2-percent increase in TrevPAR, to $299.05.
“The four-day Dreamforce event, is the biggest software conference in the world and reportedly had more than 171,000 registered ‘Trailblazers’ from 91 countries, fuelling demand for hotel accommodation across the city.
Although the Moscone Center in San Francisco has been the home of the event for some years now, this year the timing of the conference shifted to November from October in 2016, which had a significant impact on the year-on-year performance of hotels in the city this month,” added Pablo.
Despite the strong total revenue growth, Payroll levels at hotels in San Francisco increased by 1.0-percentage points this month, to 43.2-percent of total revenue. This was equivalent to a 10.8-percent year-on-year increase on a per available room basis, highlighting the challenges of Labor costs in the Bay City.
As a result of rising costs outpacing revenue growth, profit per room at hotels in San Francisco for year-to-date 2017 remains 6.1-percent behind the same period in 2016, at $119.17.
2017 has also been a challenging year so far for hotels in Philadelphia. After a strong start, hotels in Pennsylvania’s largest city faced tough trading over the summer, as year-on-year profit per room plummeted by 25.0-percent in the period from June to September.
Whilst November provided some respite, top line performance at hotels in Philadelphia has been challenged throughout 2017 by declining average room rate, which has dropped by 3.2-percent year-to-date, with the rate in the corporate segment providing the biggest challenge, as it has plummeted by 23.2-percent in the 11 months to November 2017.
Furthermore, in line with the trend across hotels in the USA, profit levels at properties in Philadelphia are being challenged by Labor costs, which have increased by 2.2-percentage points year-to-date, to 33.8-percent of total revenue.
As a result, profit per room for year-to-date 2017, at $94.94, remains 3.6-percent behind the same period in 2016, at $98.53.
Profit & Loss Key Performance Indicators – Philadelphia (in USD)
November 2017 v November 2016
RevPAR: +3.5% to $185.44
TrevPAR: +2.4% to $262.58
Payroll: +0.9 pts to 32.3%
GOPPAR: +6.7% to $105.36
Occupancy (%) – Is that proportion of the bedrooms available during the period which are occupied during the period.
Average Room Rate (ARR) – Is the total bedroom revenue for the period divided by the total bedrooms occupied during the period.
Room Revpar (RevPAR) – Is the total bedroom revenue for the period divided by the total available rooms during the period.
Total Revpar (TRevPAR) – Is the combined total of all revenues divided by the total available rooms during the period.
Payroll % – Is the payroll for all hotels in the sample as a percentage of total revenue.
GOP PAR – Is the Total Gross Operating Profit for the period divided by the total available rooms during the period.
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