Year-to-date (YTD) profit and loss data from STR for September 2023 finds that an increase in costs in the US hotel labour market reflects gains in corporate and group travel demand.
STR director of financial performance Raquel Ortiz commented: “September labour costs were higher than the summer months even though overall demand was lower. That is consistent with leisure travel subsiding corporate travel in peak season”.
Key US hotel metrics for September 2023
The September 2023 YTD per-available-room metrics across the US show a GOPPAR (gross operating profit per available room) of $75.74, an increase of 6.2% over September 2022.
An increases were similarly seen in TRevPAR (total revenue per available room) to $208.34, representing an 8.6% rise. EBITDA (earnings before interest, income tax, depreciation, and amortisation) PAR was $52.95, a 5.1% boost, and LPAR (labour costs) were $69.36, an increase of 13.1%.
Ortiz explained: “Revenue metrics have wavered month to month, but growth in labour costs has remained consistent. On a per-occupied-room basis, food and beverage labour costs were up 9.8% year to date, which was the most of any department.
“That nearly double-digit increase supports the improvement in group business we have been reporting in the top-line metrics and aligns with weekday groups lifting the bottom line. Catering and banquet revenues jumped 20% year-on-year, another measure of the return of corporate and group demand.”
Growth in top US markets
Profit levels in the major markets are further evidence of business travel and groups. Overall, 13 of the top 25 markets in the US posted double-digit growth in GOPPAR up to September 2023, led by New York City and Oahu.
“Roughly 60% of hotel industry revenue growth in the past six weeks is from weekdays, with the major markets leading the way,” said Ortiz. “Additionally, US group demand has risen by an average of 3.1% year over year since Labor Day.”
The hotel industry in Australia demonstrated a similar performance so far in 2023 after entering a period of normalisation owing to rising demand for business travel.
