US Hotels Report Record High TrevPAR Despite RevPAR Decline
TRevPAR hit record highs at hotels in the U.S. in March, propelled by a 6.8 percent year-on-year increase in non-rooms revenues, which offset a 0.6 percent decrease in RevPAR, according to the latest data tracking full-service hotels from HotStats.
Hotels in the U.S. successfully recorded a 3.0 percent increase in profit per room in March to $126.47, which was the fourth consecutive month of GOPPAR growth and was only just below the recent high recorded in October 2018 at $126.51.
The exponential growth in TRevPAR came as RevPAR fell 0.6 percent YOY to $181.89.
The robust increase in ancillary revenues included a YOY increase in food/beverage (up 4.7 percent) and conference/banqueting (up 6.0 percent) revenue, on a per-available-room basis, which fueled the 2.1 percent increase in TRevPAR in March to $295.88, the highest recorded dollar amount in the past four years.
Despite the drop in RevPAR, achieved average room rate at hotels was up 1.3 percent YOY against a 1.6 percentage-point decline in room occupancy.
Profit growth was aided by cost savings, which included a 0.3 percentage-point decrease in payroll as a percentage of total revenue, as well as a 0.1 percentage-point saving in overheads.
The solid top- and bottom-line performance resulted in profit conversion for the month of 42.7 percent of total revenue.
Profit & Loss Key Performance Indicators – U.S. (in USD)
March 2019 v. March 2018
RevPAR: -0.6% to $181.89
TRevPAR: +2.1% to $295.88
Payroll %: -0.3 pts. to 32.2%
GOPPAR: +3.0% to $126.47
“The first quarter of 2019 was kind to hotels, as not only have revenues risen, so too has there been a calming in expenses, which has led to bullish 4.2-percent GOPPAR growth,” said David Eisen, director of Hotel Intelligence & Customer Solutions, Americas, at HotStats. “Hoteliers will need to keep the pedal to the metal to ensure similar numbers for the remainder of the year.”
On the flip side, supply-striken New York City had a third consecutive month of GOPPAR decline in March, a figure that was off more than 27 percent YOY. The profit drop was led by a 6.0 percentage-point decline in room occupancy, as well as a 5.4 percent decrease in achieved average room rate, which contributed to the 11.8 percent decline in RevPAR.
Falling revenue levels were further exacerbated by rising costs, which included a 4.4 percentage point increase in payroll as a percentage of total revenue to 51.1 percent.
Profit & Loss Key Performance Indicators – New York City (in USD)
March 2019 v March 2018
RevPAR: -11.8% to $241.86
TRevPAR: -9.5% to $351.79
Payroll %: +4.4 pts to 51.1%
GOPPAR: -27.7% to $87.22
It was a positive month of profit performance for hotels in Phoenix, as GOPPAR soared by 9.4 percent to hit $243.88, which was well ahead of the rolling 12 months to March 2019 at $100.63.
March is typically a peak month for hotels in Phoenix and despite a 0.9 percentage-point decline in room occupancy, RevPAR increased 3 percent.
As a result of the movement in revenue and costs, profit conversion at hotels in Phoenix was recorded at 53.2 percent of total revenue in March.
Profit & Loss Key Performance Indicators – Phoenix (in USD)
March 2019 v March 2018
RevPAR: +3.0% to $254.68
TRevPAR: +5.7% to $458.83
Payroll %: -0.5 pts to 24.9%
GOPPAR: +9.4% to $243.88
Occupancy (%) – Is that proportion of the bedrooms available during the period which are occupied during the period.
Average Room Rate (ARR) – Is the total bedroom revenue for the period divided by the total bedrooms occupied during the period.
Room Revpar (RevPAR) – Is the total bedroom revenue for the period divided by the total available rooms during the period.
Total Revpar (TRevPAR) – Is the combined total of all revenues divided by the total available rooms during the period.
Payroll % – Is the payroll for all hotels in the sample as a percentage of total revenue.
GOP PAR – Is the Total Gross Operating Profit for the period divided by the total available rooms during the period.