Results of STRís 25th annual HOST Almanac
indicate that U.S. hotel industry revenue topped an estimated
US$189 billion in 2015, adding nearly US$14 billion in revenue
Total industry-wide house profit reached almost US$73
billion, a year-on-year increase of 9.4% on a per available room
On an absolute nominal basis, the house profit represents
an all time high, and the house profit margin for 2015 exceeds the
previous industry peak reached in 2007.
ďIndustry revenues and profits continue to reach
record highs,Ē said Joseph Rael, STRís director of financial
performance. ďAdditionally, we saw profit margin finally surpass
the previous peak from 2007. Of course, at this point in the
cycle, weíre seeing both revenue and profit growth starting to
slow, and we expect growth to continue to taper over the next
couple of years as well.Ē
Revenue and GOP growth levels
were strong in 2015, but lower than the levels experienced in
2014. On a nominal basis, house profit increased 11.2%, compared
to 12.9% in 2014.
year, the HOST Almanac presented an extensive analysis of
inflation-adjusted profits for the industry.
STR found that while profits on a nominal basis were at an all-time peak,
inflation-adjusted profits were strong, but still below previous
peaks. Also, 2014 profits were below the profit levels of six
other years since 1990 (after adjusting for inflation).
real terms, the industryís total revenue in 2015 surpassed the
levels realized at the previous peak of 2007, but remained below
the peak in 2000. Similarly, the house profit realized in 2015 was
the second-best profit level since 1990, behind only the peak of
US$15,248 per available room in 2000.
STR notes that labor
costs were much lower in 2000. In comparing a same-store set of
more than 1,100 hotels for 2000 and 2015, labor costs were up from
29.3% of total revenues in 2000 to 32.3% in 2015.
STR also analyzed same-store rates of
change for approximately 5,000 hotels that participated in the
HOST program in 2014 and 2015.
In this analysis, full-service
hotels grew house profit 7.3%, while limited-service hotels grew
profit 6.4%. Upper Midscale hotels showed the greatest profit
increases (8.4%), while the Luxury class segment recorded the
smallest increase (6.0%).
Marketing and utilities led to
the largest changes in 2015, with marketing increasing 8.6% and
utilities decreasing 3.5%. Rooms expense, A&G and POM grew
moderately (+2.4%), while management fee growth slightly surpassed
total revenue growth at 5.3%. Total labor costs grew at a
reasonable 4.2% in 2015, although salaries and wages increased
7.2% for those hotels that reported the breakdown of labor costs.
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