STR’s Hotel Operating Statistics Almanac for 2019, reveals that U.S hotel all-around house profits hit a benchmark crushing $80 billion last year, even though the cost of labor reached higher rates than the earnings. STR’s profit and loss system collects data from over 10,000 hotels every year. That makes for over 2.3 million rooms world-wide.
U.S earnings broke roughly $218 billion last year, an improvement of $10 billion from 2017, another highest record for the industry.
“Although expenses continued to outpace revenue in terms of growth, 2018 produced stronger profits than expected,” stated by STR’s Senior Director of Consulting and Analytics, Joseph Rael. “As we’ve noted in recent performance results, maintaining profitability will be a challenge moving forward with flattening occupancy levels, diminished pricing confidence, and low unemployment creating a smaller talent pool and higher wages.”
Full-service hotels increased house profit by 3.2 percent, and limited-service hotels increased by only 1.1 percent. Luxury hotels reached a massive growth of 5.3 percent, while Economy hotels declined in profit by 0.5 percent. For five years running, miscellaneous revenues – such as resort fees and cancellation fees – topped every revenue department, with the highest being an 11.3 percent increase in 2018.
For the second year in a row, STR structured industry profitability for every U.S hotel to cover departmental income & expenses, and individual segments & markets throughout the industry. Going according to their model, STR presumed total U.S food and beverage earnings to reach $40 billion, – a $2 billion increase from 2017 – earnings from other departments to be around $7 billion, and miscellaneous earnings at about $6 billion. Leading all the markets with approximately $14 billion in total revenue was the city of sin, Las Vegas. Ranking in second place with a total revenue of $12 billion was the city that never sleeps, New York City. Completing the top five spots were Los Angeles, Washington D.C, and Orlando, with total revenues all surpassing the $6 billion mark.