HotStats Q1 Market Review: U.S. Hotels Post Yet More Positive Profit Growth
Q1 2018: U.S. Hotels Post Yet More Positive Profit Growth
Hotels in the U.S. posted a 1.8 percent year-on-year increase in profit per room in Q1 2018. This marks the third consecutive year of GOPPAR growth for the period, according to the latest poll of full-service hotels in the U.S. from HotStats.
The growth in profit was driven by a 2.2 percent increase in TrevPAR as hotels delivered record revenue increases across all departments.
The 2018 over 2017 Q1 TrevPAR growth contributed to the CAGR increase of +5.0 percent per annum over the last four years, to $259.68 in Q1 2018, an uplift of almost $20 from Q1 2015.
However, amongst the positive growth story, hotels in the U.S. find themselves wrestling with rising costs.
The key cost increase has been labor, which has grown to 35.8 percent of total revenue in Q1 2018 from 33.4 percent in Q1 2015.
Even though GOPPAR reflects a CAGR of +2.9 percent per annum over the last four years, the froth may be coming off profit conversion. GOP as a proportion of total revenue fell to 37.2 percent in Q1 2018, from 37.3 percent in Q1 2017. Moreover, flow through in the last two years has fallen from 51 percent in Q1 2017 to 31 percent in Q1 2018.
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.
