Trump Economy Driving Profit Growth at Hotels Across the U.S. in 2017

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Trump Economy Driving Profit Growth at Hotels Across the U.S. in 2017

The profitability of hotels in the U.S. increased in 2017 in line with the growth of the economy under President Trump, according to the latest findings from a brand-new publication called ‘Profit Matters: U.S. Annual Hotel Performance Tracker 2018’, which has today been released by the hotel benchmark service, HotStats.

According to the report, full-service hotels in the U.S. recorded a 2.9-percent increase in profit per room in 2017, which was on the back of growth in all revenue departments fuelling a 2.5-percent increase in TrevPAR(Total Revenue per Available Room) for the year.

The growth in hotel revenue was attributed to the 2.3-percent year-on-year increase in GDP in the U.S., as the performance of hotels in North America has a strong correlation with the health of the economy. 

In addition to a 2.0-percent increase in RevPAR, growth in Non-Rooms Revenues, including Food & Beverage (+2.4-percent), contributed to the uplift in TrevPAR, with the strongest month of hotel performance identified as October 2017, where Total Revenue levels peaked at $284.03 per available room.

That said, whilst falling unemployment levels and increases in minimum wage are also seen as positive indicators of economic performance, the publication cites Labor costs as one of the biggest threats to profit levels at hotels in the US going forward, illustrated by the 1.7 percentage point year-on-year increase in 2017, to 34.9-percent of total revenue.

Nevertheless, the outlook for the overall U.S. hotel market in 2018 is positive, with consumer spending likely to remain supported by rising household wealth, thanks to the booming stock market and higher house prices, as well as tax cuts. 

In addition to covering the overall U.S. hotel market, the publication drills down to reveal the profit performance of individual city markets across the U.S., providing a flavor of the capability of HotStats. This includes Washington D.C., San Diego, Houston, New York City, where the profit conversion of hotels are amongst the lowest in the country, and San Francisco, where profit levels have been challenged by escalating Labor costs

“HotStats is proud to be publishing the results of the first ‘Profit Matters: U.S. Annual Hotel Performance Tracker’ which presents comprehensive monthly data for the full calendar year 2017 versus 2016. 

We are hugely excited to be bringing this product to the USA and thrilled at the engagement from the industry’s leading hoteliers, whom we would like to thank for their invaluable contribution. 

For the first time, through the power of HotStats, America’s hotel industry can access and apply monthly operational profit and loss benchmarking to combat today’s challenges and properly align owners and operators through crystal clear visibility all the way to the bottom line,” said Pablo Alonso, CEO of HotStats.

Table - US Hotel Performance 2017

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