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hotel profitability down in August

USA Hotels Profitability Went Down in August 2021

USA hotel profitability took a dip in August this year. With the end of the summer travel surge, the US hotels estimated gross operating profit dipped and came behind last month’s figures.

Estimated GOP was 111% of 2019 levels in July but just 94% in August. The only key profitability metric that showed increase, month over month, was labor per available room.

“There was a decline in the percentage of U.S. hotels to break even on both a GOP and net income basis, and labor costs were up even with weakened demand. An encouraging sign came in the major markets, with improved TrevPAR and GOPPAR indices because of higher realized occupancies, but obviously those markets have the longest way to go,” said Raquel Ortiz, assistant director of financial performance, STR.

Key profitability metrics that were measured included:
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