Hotel demand in the U.S. top 25 markets has been on a slow and steady recovery, mostly held back due to a lack of group and business travel. But as hotel revenue per available room has recovered to almost normal levels in these markets, profits also have slowly come back.
Gross operating profit per available room (GOPPAR) is a hospitality industry metric that measures the relationship between revenue and expenses, providing a better picture of hotel financial health. GOPPAR is calculated as total revenue minus total expenses, divided by total rooms available.
Track the GOPPAR changes for the top markets by using the interactive recovery charts, which will be updated monthly. Actual GOPPAR is displayed for each market in any given month, from largest to smallest profit margins in dollar terms. Adjust the drop down at the top left to change the month and watch how the rankings change.
To view GOPPAR indices compared to 2019, click the right arrow in the slideshow. In this chart, the top and bottom performers from the current month are highlighted. You can hover over the chart to see all other top market performance.
More insights into the top 25 markets are offered in STR's U.S. Monthly P&L Review, which provides key performance indexes to measure profitability across key markets and segments. STR is CoStar's hospitality analytics firm.
GOPPAR is an important tool for any hotel to evaluate financial health but can also be used to track market level trends. Prior to the pandemic, the top 25 U.S. markets outperformed all other markets and the total U.S. with a GOPPAR range of $38 in Detroit to $168 in Oahu, and an average of $87. This strong performance is indicative of the popularity of these large markets for both leisure and group/business travel.
When the pandemic hit the U.S. in March 2020, the top 25 markets were quick to feel its impacts as average GOPPAR turned negative in the first month. All top 25 markets realized negative GOPPAR by April and average GOPPAR for these markets hit its lowest point of -$17. It took 16 months for all top markets to realize positive GOPPAR again.
Throughout 2021, top 25 markets regained some of that lost GOPPAR, particularly in warm-weather/beach destinations and drive-to markets which consistently outperformed big city/downtown districts throughout the pandemic. That wasn't a big surprise as leisure travel has been able to pick back up through the pandemic but group and business travel has struggled to return.
Another big factor that has played into profitability is labor. Many of the markets that have struggled to return to profitability have been in union labor markets. While these markets have slowly recovered, at the end of 2021 the top 25 markets were only at 41% of 2019 GOPPAR levels.