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HotStats: U.S. trails the world in hotel profits

Rising expenses are eating meager gains in revenue

U.S. HOTELS REMAIN stuck in the low profitability trend begun by the COVID-19 pandemic even as the global market continues to adjust upward, according to HotStats. The trend continued in September as time passes away from the small bump seen in recent summer travel.

Hotel profits for the month stood at negative $9.19, down 34 percent from the month prior and a 109.6 percent year-over-year decrease, according to new data from HotStats. It was the seventh consecutive month for negative profits, according to the report, with similar results seen in August.


At what is typically a strong time for hotels, rising expenses are eating marginal gains in revenue. RevPAR rose 7.5 percent over August to $38.11 following a 1.7-percentage-point increase in occupancy, bringing rates up slightly. Total RevPAR went up more than $4 over the previous month.

At the same time, labor costs for September rose, contributing to a $12 increase since April, as previously closed hotels reopened. The costs also rose as a percentage of total revenue by 9 percentage points since July, and total overhead costs rose 5.5 percent over August but were down 46.8 percent from the previous year.

"U.S. hotels can't seem to break out of their profit malaise unlike other global regions, which have cinched at least positive month-to-month profit," said David Eisen, HotStats director of hotel intelligence, Americas. "A summer bump from leisure travel could give way to a quieter winter, as corporate and group travel are forecasted to remain muted. Hoteliers have found innovative ways to generate revenue from their assets, but it may not be enough to fill a rather widening gap."

The outlook for the immediate future remains unclear, according to HotStats, and depend largely on whether Congress passes another round of stimulus money. Associations such as AAHOA and the American Hotel & Lodging Association have been maintaining pressure on Congress to come to an agreement on the next stimulus bill.

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