After falling to roughly US$20.00 in January, gross operating profit for U.S. hotels reached nearly US$59.00 – the highest level in the metric since October 2021, according to STR‘s February 2022 P&L data release.
All of the key performance metrics increased from January, after concerns around Omicron pushed levels lower.
- TRevPAR: US$169.77
- EBITDA PAR: US$39.29
- LPAR (Labor Costs): US$56.63
“Following trends in top-line performance, U.S. profitability levels are recovering more quickly from Omicron than with previous variants,” said Raquel Ortiz, STR’s director of financial performance. “February GOPPAR was roughly 77% of the 2019 comparable, but independents (108%), luxury (94%) and midscale (88%) chains were far above the national average. The upper upscale (67%) and upscale (70%) segments are where the largest deficits persisted.
“Around the country, some Top 25 Markets, such as Miami (135%) and Phoenix (118%), exceeded pre-pandemic levels in GOPPAR. New York (-340%) and Chicago (-187%) were the only two markets in that group with negative profit levels. Fortunately, recent improvements in top-line performance have us expecting gains in profitability for those and many more markets when we process March P&L data.”
Among increases during the month, total labor costs were up to 97% of the pre-pandemic comparable. That was the second-highest index to 2019 of the pandemic-era, behind December 2021.
“As we look toward the spring and summer months, a further rise in labor costs might be expected due to increased demand,” Ortiz said. “However, our February data shows labor margins leveling out, which is likely due to those increased costs being absorbed by the increase in room rates.”