27 April 2015 BROOMFIELD, Colorado—Hotel industry revenue levels topped an estimated US$176 billion in 2014, which is nearly US$14 billion more than 2013, according to STR Analytics’ 2015 Hotel Operating Statistics (HOST) Almanac. Total industry-wide house profit reached nearly US$66 billion, an increase of 12.8 percent when compared to 2013. On an absolute nominal basis, this house profit represents an all-time high, though the percent of total revenue is still below profit levels recorded in the late 1990s, 2006 and 2007. The following chart details U.S. hotel industry profitability from 1990 to 2014. Please note this data extrapolates only on scale with the total amount of properties reporting room revenue to STR and uses all properties that reported profitability data, not just same-store properties. Also, house profit is defined as profit before deductions for fixed charges and management fees. Source: STR Analytics “What’s interesting was not just the increases in revenue, but the surge in operating expenses in 2014,” said Joseph Rael, senior project manager at STR Analytics and overseer of the HOST program. “On a per-available-room (PAR) basis, we’re seeing administrative and general, marketing, maintenance and utilities at growth rates much higher than what we experienced last year. We’re also seeing total management fees growing faster than total revenue, which indicates incentive fees are finally kicking in.” Source: STR Analytics Industry-wide, the growth in operating expenses outpaced departmental expenses, similar to what occurred in 2006 and 2007. On a PAR basis, house profit soared 13.1 percent, the greatest rate of change since 2005, when house profit increased 14.9 percent. Same-Store Analysis STR Analytics also analyzed same-store rates of change for approximately 5,000 hotels that participated in the HOST program in 2013 and 2014. In this analysis, full-service hotels grew house profit 11.3 percent, while limited-service hotels grew profit 7.2 percent. Luxury hotels showed the greatest profit increase (+11.7 percent), while the combined Midscale/Economy segment of hotels recorded the smallest increase (+4.5 percent). Source: STR Analytics; Same-store analysis based on over 5,000 hotels reporting data in 2013 and 2014 In real (inflation-adjusted) terms, total revenues for the industry on a PAR basis fell short of the levels realized not only in the previous peak of 2007 but also of six other time periods since 1990. Similarly, the house profit realized in 2014 was bested six other times in the past quarter-decade, with the peak of US$15,228 per-available-room occurring in 2000. However, the 2014 house profit was higher than the long-term average for the first time since 2008. Source: STR Analytics Custom HOST orders with 2014 data are now available for order, and the HOST Almanac will be available for purchase in early May. Please contact [email protected] ordering or information on the program.
