Based on nearly 6,000 hotels reporting income and expense statements to STR, U.S. hotel-industry profit came in just under the peak level recorded in 2007. Total industry revenue levels topped an estimated US$162 billion, with house profit reaching US$58 billion and net operating income just under US$40 billion.
“No matter how you revenue-manage your hotel, it’s ultimately about profit,” said Carter Wilson, director of STR Analytics, which oversees the HOST Almanac. “While it’s encouraging that the gross numbers for 2012 is near record highs, many properties are still not back to peak profit. Luxury and Upper Upscale properties are leading the charge back to profitability, but there are still a lot of struggles in the middle and lower Chain Scale segments.”
However, while profits were up, revenue growth moderated compared to gains achieved in 2011. Total industry revenues grew 5.2 percent in 2012 (4.7 percent per-available-room), compared to 8.8 percent in 2011.
Operators battled the slowing revenue growth with tighter cost controls, as evidenced by a mild 2.3-percent increase in operated department expenses.
“We saw particular controls exhibited over rooms expenses,” said Caitlyn Milton, business intelligence manager at STR Analytics. “Rooms expenses grew at 73 percent the rate of room revenue. Some of this had to do with more growth in rate than occupancy in 2012, but operators seem to be succeeding in controlling variable costs better than before.”
Overall industry net operating income increased 13.4 percent in 2012, after adjusting for a 4.0 percent reserve for replacement expense. Net operating income does not include deductions for rent, amortization, depreciation or debt service.
Other highlights of the 2013 HOST Almanac:
- Full-service hotels reported an average occupancy of 70.2 percent and an average daily rate of US$159.52 in 2012.
- On average, full-service hotels generated US$244.76 in total revenue per occupied room night, up from US$240.08 in 2011. Full-service, chain-affiliated hotels checked in at US$237.26 per occupied room night while independent properties reported US$336.16 per occupied room night.
- GOP for full-service properties was 34.1 percent, compared with 31.5 percent in 2011. GOP was approximately US$21,344 per available room and US$83.57 per room night.
- Overall in 2012, limited-service hotels recorded an occupancy of 70.7 percent (up slightly from 70.0 percent in 2011) and an ADR of US$92.15 (compared with US$89.85 in 2011).
- Limited-service hotels reported a GOP of 49.9 percent, which was an increase from 48.8 percent in 2011. These hotels generated US$47.44 in GOP per occupied room night and US$12,129 per available room.
- Franchise fees in chain-affiliated, limited-service hotels accounted for 2.6 percent of the undistributed operating expenses, which equates to US$2.42 per occupied room night.
For
the first time in the HOST Almanac program, STR Analytics collected
over 90 additional line items of income and expense from
participating properties. Highlights from the additional lines
reported include:
- Luxury hotels outperformed upper-upscale hotels in banquet revenue (per available room) on a 2:1 basis.
- Luxury hotels also had a significantly higher capture of revenue from cancellation fees than any other class.
- For properties reporting over US$5,000 in F&B revenues, 83 percent of these hotels registered a profit in the F&B department (including outlets, banquets, room rental, in-room dining, and mini-bars combined). Luxury and Upper Upscale properties were most likely to be profitable.
- For reporting full-service hotels, Internet revenue per-occupied-room ranged from US$0.48 at upscale properties to US$1.36 for luxury hotels.
The
HOST Almanac, formally the HOST Study, breaks down the U.S. hotel
industry revenues and expenses in 2012 by department. With a sampling
of over 5,800 properties, it is the most complete study of its kind.
The 2013 Custom HOST is now available and the 2013 HOST Almanac is
available for pre-order. All HOST Almanac pre-orders will include an
instant HOST Companion data file.
