As the global pandemic appears further in the rearview mirror, hotel performance is driving back to more recognizable, dependable and stable movements on the top and bottom line, according to HotStats.
Consider Europe. There, gross operating performance in September was up 39% over August. In comparison, GOPPAR in September 2019 increased 34% versus August 2019. Meanwhile, total revenue per available room (TRevPAR), grew 20% in September versus August and 18% in September 2019 versus to August 2019.
It’s getting clearer that hotel performance is becoming more dependable and based on seasonality rather than other market variables, though this remains a fluid environment.
The same is holding true in the U.S., where GOPPAR was up 29% in September compared to the month prior, and up 24% in September 2019 compared to the month prior.
But at what cost…
The one abnormality to all this that will have consequence on profitability are rising labor costs. In Europe, payroll costs on a per-available-room basis were up to their highest level in September on a nominal basis since November 2018 and, at $58.11, $2.99 higher than in September 2019.
Utilities are also on the rise, as the war in Ukraine puts pressure on energy costs. Utility expenses on a PAR basis in Europe were up to $9.05 in September, the highest level they’ve been on HotStats’ record. They are now up $6.97 since the bottom of the pandemic in May 2020. Electricity has now spiked to above $5.98 on a PAR basis.
Still, profit margins in Europe and across the globe are now creeping back up to historical levels. At 42% in September, it’s on par or higher than 2019 levels.