U.S. hotel profitability improved in October
U.S. hotel profitability hit double figures for the first time since February, and year-over-year comparisons improved slightly from the previous month, according to STR’s October Profit and Loss data release.
In a year-over-year comparison with October 2019, the industry reported the following:
GOPPAR: -88.3% to US$12.69
TRevPAR: -72.2% to US$70.96
EBITDA PAR: -103.8% to US$-3.24
LPAR (labor costs): -61.1% to US$31.28
The industry’s GOPPAR was in single digits for the previous three months, including a level of US$8.14 in September.
“There were positives in the profitability data even as occupancy flattened and the extension of the summer leisure lift came to an end,” said STR operations analyst Audrey Kallman. “GOP margin increased 6 percentage points from September, and certain location types reported encouraging data — GOPPAR for airport hotels was nearly three times higher than the previous month, and interstate properties drew close to pre-pandemic levels.
On the negative side, she said, a lack of group business continued to stand out, with upper upscale hotels showing the lowest GOPPAR among the classes, adding that October is usually a strong month for conferences and events, but without significant demand generators, GOPPAR for upper upscale properties came in more than US$100 lower than this time last year.
Mexico market update
The latest Mexican market report from Horwath HTL gives insight into the current state of the Mexican economy, the tourism sector, and the evolution of variables that have a tangible influence on the hotel investment market amidst the COVID-19 pandemic. Key findings include:
- Mexican gross domestic product (GDP) will likely experience a decline close to 10% for 2020
- The tourism sector will not return to 2019 levels until the end of 2022
- The current administration has not applied concrete countercyclical policies that incentivize a faster recuperation of the tourism industry
- The behavior of dollar-Mexican peso parity could result in a relevant competitiveness gain for the region
Aimbridge managing 31 hotels in the U.K.: Plano, Texas-based Aimbridge Hospitality’s international division, Interstate Hotels & Resorts, will manage 31 Jupiter Hotels located across the United Kingdom, operating the company’s entire U.K. portfolio. The portfolio includes Holiday Inn and Mercure brands as well as two independent hotels. With the addition of these hotels, Interstate’s U.K. presence expands by 3,206 rooms.
SVC transfers 99 hotels to IHG’s Sonesta: Newton, Massachusetts-based Service Properties Trust completed the transition of branding and management for 99 hotels to subsidiaries of InterContinental Hotels Group’s Sonesta International Hotels Corp. Three additional hotels located in Canada and Puerto Rico will transition to Sonesta in mid-December and one hotel located in Atlanta, Georgia will continue to be managed by IHG. The three hotels scheduled to be transitioned to Sonesta in mid-December will be operated under the Royal Sonesta and Sonesta ES Suites brands.
Preferred’s 15 openings in 2021: Newport, California-based Preferred Hotels & Resorts will have 15 new openings within its global portfolio throughout 2021. The boutique openings include: The Londoner (London) – launching in April; and the Casa di Langa (Piedmont, Italy), The Wall Street Hotel (New York) and Pendry Chicago (Chicago) all launching in spring.
Crestline managing three in Massachusetts: Fairfax, Virginia-based Crestline Hotels & Resorts will manage three Massachusetts hotels — the 112-room Residence Inn Boston Marlborough, the 108-room Residence Inn Boston Westford, and the 110-room Hampton Inn & Suites Westford-Chelmsford.