U.S. hotel profitability improved in September; labor costs exceed 2019

U.S. hotel gross operating profit per available room (GOPPAR) improved from the month prior and exceeded the pre-pandemic comparable, according to STR‘s September 2022 P&L data release. Additionally, the cost of labor per available room came in higher than the pre-pandemic comparable for the first time.

• GOPPAR: US$84.03
• TRevPAR: US$222.97
• EBITDA PAR: US$60.71
• LPAR (Labor Costs): US$71.52

Labor costs moved ahead the 2019 comparable due to continued high levels of hospitality unemployment and more spending on contract labor”. “Total labor costs were up 5% year to date, with all departments reporting higher expenses, except F&B, due to less group demand earlier this year. “GOPPAR was the strongest since June 2022, and profit margins came in higher than September 2019. Profit margins have been strong for some time caused by lower employment levels and reduced services.Raquel Ortiz, STR’s director of financial performance

Thirteen of the major markets realized both GOPPAR and TrevPAR levels higher than the 2019 comparables.

Miami still remains the front-runner when it comes to both GOPPAR and TrevPAR recovery. Just three of the Top 25 Markets – Minneapolis, New Orleans, and San Francisco – remained below 80% of 2019 GOPPAR levels. While San Francisco is showing some improvement, other business-centric markets, such as Chicago and New York City, saw GOPPAR that was higher than the pre-pandemic comparable.Raquel Ortiz, STR’s director of financial performance

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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