It’s been a rollercoaster ride, but Europe’s hotels are now back to pre-pandemic profit levels, with gross operating profit per available room (GOPPAR) hitting $97.18 in June, slightly higher than the same month in 2019, according to the latest data from HotStats.
Since January, European hotel profit has taken off like a rocket ship, up 1,970%, and spurred by an increase in travel demand, lessened COVID restrictions and ADRs that continue to exceed 2019 levels. In June, ADR in Europe was $36.72 higher on a nominal basis than in June 2019.
Total revenue in Europe was $6.12 higher in June than in June 2019. For the second quarter, GOPPAR, expectedly, was more than 1,300% higher than in Q2 2021.
The top line provided cover for the bottom line as expense lines continued to creep upward. Just like profit was above 2019 levels on a nominal basis, so, too, were labor costs, which at $57.12 on a PAR basis was more than $1.02 higher than in June 2019.
The U.S. hasn’t displayed the meteoric growth on the bottom line as Europe, but continues to push out positive increases. GOPPAR in June hit $97 and hasn’t moved much since March after a palpable increase from February to March of $31.
Total revenue remains lower than 2019 levels at $238 on a PAR basis in June. Q2 GOPPAR was 141% higher than in Q2 2021.
Payroll continues to move upward in the U.S. on account of a tighter labor market that is resulting in higher pay to recruit talent. Still, labor costs are below 2019 levels and sit at $72 in June, 17% lower than at the same time in 2019.
Middle East backs up
The Middle East was another tale altogether. After seeing March GOPPAR hit an unprecedented $115, in the last month of Expo 2020, the region’s fortunes changed thereon, with GOPPAR down to $49 in June. However, the drop in profit is likely more a factor of normalization and seasonality as the summer months are typically down performance-wise in the Middle East.
Though GOPPAR has come back down to Earth, the good news is that June’s number was still $5 higher than in June 2019. Q2 GOPPAR was 123% higher than in Q2 2021, a triple-digit percentage but evidence that the Middle East in 2021 did not drop at the same rates as Europe and the U.S. As profit dipped, so did revenue, with TRevPAR down to $167 in June 2022, but still on par with 2019 levels.
China’s silver lining
After a spate of uneven months of performance, things are gradually improving across China’s hotel sector, with three consecutive months of improvement. Still, profit numbers are well off from pre-pandemic levels, the result of myriad lockdowns across the country that all but stymied travel.
GOPPAR in June hit $13, which was 65% lower than the month in 2019. Unlike most all other regions, China’s Q2 GOPPAR was lower than at the same time a year ago, down 86%.