The hotel industry closed the first quarter of 2022 with strong steps towards recovery, according to the latest monthly profit and loss data from STR, CoStar's hospitality analytics firm.
Estimated total U.S. hotel revenues and profits are closer to 2019 levels — on a per-available-room basis, all profitability key performance indexes for March 2022 were at their highest point since the pandemic started.
Revenue per available room of $204.84 and gross operating profit per available room of $83.81 recorded for March 2022 are at 91% and 90% of 2019 levels. Profit margins are also improving, and at 40.9% are now only 0.2 percentage points away from those reported in March 2019.
Still, all U.S. top 25 markets reported stronger total revenue per available room levels, indexing at 56% or higher to 2019. Benefiting from warm weather and spring break, Miami, Orange County, San Diego, Phoenix and Tampa made their way past recovery and reported higher gross operating profit per available room than in 2019. Orlando, Los Angeles and Nashville have also recovered as more events have boosted group demand for these markets.
Despite group demand improving in March, profitability recovery has been slower in markets with higher labor costs and higher reliance on international travelers, such as San Francisco, New York and Oahu — with GOPPAR at 34%, 47%, and 50% of 2019 levels, respectively.
Phoenix is the big winner this month as it has recovered its leader position with the highest GOPPAR ($265) among all top 25 markets, and a profit margin of 55%. While having lower GOPPAR, Tampa ($177) and Nashville ($103) achieved the highest GOP margins of 58% and 57% respectively.
Claudia Alvarado is Analytics Manager with STR's Consulting & Analytics team, based in Broomfield, Colorado.