HENDERSON, Tenn. — Gross operating profit for U.S. hotels reached 52 percent of the comparable 2019 level last year, according to recently released data from STR.
Strong holiday demand in both November and December helped overall profitability levels, with December showing 2021’s highest recovery index in each key metrics including total revenue per available room, gross operating profit per available room, and total labor costs per available room.
“Though the industry still has a way to go on the path to full recovery, a lot of headway was made in 2021,” said Raquel Ortiz, STR’s assistant director of financial performance. “Each passing month we saw revenues and profits continue on a positive, upward trend. Profit margins were relatively strong throughout the remaining close to pre-pandemic levels. Better margins largely stemmed from lower expenses, due to lower demand, and a lack of groups and meetings, while other lifts came from cuts in room service, more online customer service, and lower employment levels. Labor costs, which were a large concern even before the pandemic, will continue to put pressure on the bottom line.”
The three Southern cities with the highest gross operating profit for hotels compared to 2019 were Miami (around 90 percent), Nashville (around 80 percent), and St. Louis (around 60 percent).
