U.S. hotel profits fell 84.6% in 2020
Including a 100.6% decline in December, U.S. hotel profitability fell 84.6% in 2020, according to STR's latest monthly P&L data release. December gross operating profit per available room (GOPPAR) came in worse than any month since June in both absolute terms and year-over-year comparisons. "Lower demand in December coupled with fixed expenses for hotels meant profit declines on par with early in the pandemic," said Raquel Ortiz, assistant...
Including a 100.6% decline in December, U.S. hotel profitability fell 84.6% in 2020, according to STR's latest monthly P&L data release.
December gross operating profit per available room (GOPPAR) came in worse than any month since June in both absolute terms and year-over-year comparisons.
"Lower demand in December coupled with fixed expenses for hotels meant profit declines on par with early in the pandemic," said Raquel Ortiz, assistant director of financial performance for STR. "That only worsened the overall 2020 figures, which showed an average profit level less than $15 per room after coming in at almost $95 in 2019. As noted in our revised forecast, this year is off to a slow start amid a worsening pandemic situation, so the pattern of dwindling profitability will likely continue in the coming months."
Six of the major markets reported GOPPAR declines worse than 100% in 2020. Among those markets, New York City reported the steepest decline in the metric (-136.5%). Minneapolis/St. Paul showed the largest decrease in total revenue per available room (TRevPAR: -83.8%).
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Key profitability metrics:
- TRevPAR - Total revenue per available room
- GOPPAR - Gross operating profit per available room
- EBITDA - Earnings before interest, income tax, depreciation, and amortization
- LPAR - Total labor costs per available room
About CoStar Group, Inc.
CoStar Group (NASDAQ: CSGP) is a global leader in commercial real estate information, analytics, online marketplaces, and 3D digital twin technology. Founded in 1986, CoStar Group is dedicated to digitizing the world’s real estate, empowering all people to discover properties, insights, and connections that improve their businesses and lives.
CoStar Group’s major brands include CoStar, a leading global provider of commercial real estate data, analytics, and news; LoopNet, the most trafficked commercial real estate marketplace; Apartments.com, the leading platform for apartment rentals; Homes.com, the fastest-growing residential real estate marketplace; and Domain, one of Australia’s leading property marketplaces. CoStar Group’s industry-leading brands also include Matterport, a leading spatial data company whose platform turns buildings into data to make every space more valuable and accessible; STR, a global leader in hospitality data and benchmarking; Ten-X, an online platform for commercial real estate auctions and negotiated bids; and OnTheMarket, a leading residential property portal in the United Kingdom.
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