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GOPPAR Levels Hit 2017 High At U.S. Hotels

Monday, November 27, 2017
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Profit levels at hotels in the US hit a 2017 high of $135.08 per available room this month, fueled by year-on-year growth across all revenue departments, according to the latest worldwide poll of full-service hotels from HotStats.

Year-on-year growth in both room occupancy ( 2.2-percentage points), to 81.3-percent, and achieved average room rate ( 1.7-percent), to $216.70, contributed to a 4.6-percent increase in RevPAR, enabling hotels in the USA to record a 2017 peak of $176.28.

In addition to the growth in RevPAR, hotels in the US recorded increases in non-rooms revenues, including Food and Beverage ( 11.2-percent) and Conference and Banqueting ( 15.0-percent) on a per available room basis. As a result, year-on-year growth in TrevPAR increased by 6.7-percent, to $282.76.

The TrevPAR recorded this month was almost $30 above the year-to-date level, at $252.97 and also represented a peak for 2017.

Despite cost increases, which included a 1.2-percentage point increase in Labor to 31.5-percent of total revenue, profit per room at hotels in the US increased by 9.1-percent year-on-year to $120.89, equivalent to a profit conversion of 42.8-percent.

“The bumper profit performance in October provided hotels in the US with some respite from the recent challenging period of operation, with data for the month suggesting that the strong performance was led by an increase in volume and price from the commercial segment.

The profit levels recorded this month were more than 25-percent above the performance so far in 2017, and have pushed the year-on-year GOPPAR figure into more positive territory, which will buoy hotel owners and operators in the region,” said Pablo Alonso, CEO of HotStats.

Hotels in Washington, DC, were amongst the best performing in the US in October, recording a 16.5-percent year-on-year increase in profit per room to $192.60, equivalent to a staggering 49.3-percent profit conversion, and a 2017 high for hotels in the capital.

In line with the overall USA market, the growth was due to an uplift in activity in the commercial segment, which included a 7.1 per cent increase in the achieved rate in the residential conference segment, to $355.97, as well as a 6.7-percent increase in volume in the corporate segment, to 33.4% of all roomnights sold this month.

The strong demand from the commercial segment this month enabled RevPAR levels at hotels in Washington, DC, to reach a 2017 high at $269.01, with increases recorded in both room occupancy ( 4.4-percentage points), to 90.6-percent, and achieved average room rate ( 5.2-percent), to $296.82.

“Amongst the business activity in Washington, DC, in October was the Annual Meeting of the Board of Governors of the World Back Group and the International Monetary Fund. This year, the high-profile meeting was attended by 4,000 member-country delegates, 650 observer organization representatives, 900 members of the press and 550 accredited civil society members. Little wonder that hotels in the capital were able to record such premium performance levels this month,” added Pablo.

Over on the west coast, hotels in Portland were also among those to achieve strong profit growth this month, recording a 15.1-percent year-on-year increase in GOPPAR to $147.29.
While hotels in Portland recorded a 4.2-percent increase in RevPAR, to $188.54, the growth this month was primarily through room occupancy, which increased by 4.4-percentage points, to 90.3 percent and offset the 0.9-percent decline in achieved average room rate to $208.71.

The uplift in volume fueled the utilization of ancillary facilities, enabling an increase in non-rooms revenues, including Food & Beverage ( 50.5-percent) and Conference & Banqueting ( 71.1-percent). This contributed to a year-on-year increase in non-rooms revenues of $36.26 per available room, which far outpaced the growth in pure rooms revenue, at just $7.62.

The significant contribution from all revenue departments meant that hotels in Portland recorded a 16.9-percent year-on-year increase in TrevPAR to $303.67.

The significant year-on-year increase in total revenue was not sufficient to offset the growth in Payroll levels at hotels in Portland, which increased by 1.1-percentage points, to 28.0-percent of total revenue.

Despite this increase, profit performance at hotels in Portland increased by 15.1-percent year-on-year to $147.29. However, the positive profit performance this month was not sufficient to offset the year-to-date decline and, at $111.78, GOPPAR at hotels in Portland remains 2.2-percent behind the same period last year for the 10 months to October 2017.

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