U.S. Hotel Profits Surge: Top 25 Markets Lead Growth in Revenue and Profit

Thursday, December 7, 2023

In a game-changing revelation, CoStar’s October P&L data unveils a significant boost in U.S. hotel profitability driven by enhanced group demand in the Top 25 Markets. The report, a testament to CoStar’s prowess in real estate analytics, indicates a remarkable upswing in key metrics.

Key Metrics (October 2023 vs. October 2022):

GOPPAR: US$97.45 (+3.7%)

TRevPAR: US$240.74 (+4.0%)

EBITDA PAR: US$69.60 (-1.2%)

LPAR (Labor Costs): US$74.48 (+5.9%)

Remarkably, the industry has witnessed the most substantial year-over-year increases in GOPPAR and TRevPAR since March 2023. Audrey Kallman, a research analyst at STR, notes, “The Top 25 Markets have shown an 11% jump in GOPPAR year to date, despite a 14% lift in labor costs.” New York City emerges as a frontrunner in this growth, leading both on a year-to-date and monthly basis.

An interesting highlight is the alignment of F&B labor costs with the improvement in corporate demand. Kallman observes, “F&B labor costs on a per-occupied-room basis showed the largest year-to-date growth of any department, indicating a rebound in weekday group performance across the topline.”

The industry’s overall eight Top 25 Markets reported double-digit increases in GOPPAR, reflecting a robust and widespread growth pattern.

Key Profitability Metrics Defined:

TRevPAR: Total revenue per available room

GOPPAR: Gross operating profit per available room

EBITDA: Earnings before interest, income tax, depreciation, and amortization

LPAR: Total labor costs per available room

CoStar Group, a NASDAQ-listed leader in online real estate marketplaces, continues to shape the property markets globally. With a vast database and comprehensive research, CoStar provides unmatched insights into property values, market conditions, and availabilities.

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