The profitability of hotels in the U.S. increased in 2017, in line with the growth of the economy under President Trump, according to the latest findings from a new publication, "Profit Matters: U.S. Annual Hotel Performance Tracker 2018," released by the hotel benchmark service, HotStats.

According to the report, full-service hotels in the U.S. recorded a 2.9 percent increase in profit per room in 2017, which was on the back of growth in all revenue departments fueling a 2.5 percent increase in TrevPAR (Total Revenue per Available Room) for the year.

Source: HotStats LimitedSource: HotStats Limited
Source: HotStats Limited

The growth in hotel revenue was attributed to the 2.3 percent year-on-year increase in GDP in the U.S., as the performance of hotels in North America has a strong correlation with the health of the economy.

In addition to a 2.0 percent increase in RevPAR, growth in non-rooms revenues, including food & beverage (+2.4 percent) contributed to the uplift in TrevPAR, with the strongest month of hotel performance identified as October 2017, where total revenue levels peaked at $284.03 per available room.

That said, while falling unemployment levels and increases in minimum wage also are seen as positive indicators of economic performance, the publication cites labor costs as one of the biggest threats to profit levels at hotels in the U.S. going forward, illustrated by the 1.7 percentage point year-on-year increase in 2017, to 34.9 percent of total revenue.

Nevertheless, the outlook for the overall U.S. hotel market in 2018 is positive, with consumer spending likely to remain supported by rising household wealth, thanks to the booming stock market and higher house prices, as well as tax cuts.

In addition to covering the overall U.S. hotel market, the publication drills down to reveal the profit performance of individual city markets across the U.S., providing a flavor of the capability of HotStats. These markets include Washington D.C., San Diego, Houston, New York City, where the profit conversion of hotels are among the lowest in the country, and San Francisco, where profit levels have been challenged by escalating labor costs

"HotStats is proud to be publishing the results of the first 'Profit Matters: U.S. Annual Hotel Performance Tracker,' which presents comprehensive monthly data for the full calendar year 2017 versus 2016.

We are excited to bring this product to the U.S. and thrilled at the engagement from the industry's leading hoteliers, whom we would like to thank for their invaluable contribution.

For the first time, through the power of HotStats, America's hotel industry can access and apply monthly operational profit and loss benchmarking to combat today's challenges and properly align owners and operators through crystal clear visibility all the way to the bottom line," said Pablo Alonso, CEO of HotStats.

About HotStats

HotStats provides monthly P&L benchmarking and market insight for the global hotel industry, collecting monthly detailed financial data from more than 8,500 hotels worldwide and over 100 different brands and independent hotels. HotStats provides more than 550 different KPIs covering all operating revenues, payroll, expenses, cost of sales and departmental and total hotel profitability.

David Stephens
Operations Manager - HOTSTATS
HotStats Limited