According to STR Analytics' Hotel Operating Statistics (HOST) Almanac, the hotel industry revenue levels topped an estimated US$163 billion in 2013, with house profits nearing US$60 billion and net operating income just more than US$41 billion. These absolute levels represent new peaks, though fall shy of the record levels on a per-available-room (PAR) and percent-of-revenue basis set in 2007.
"2013 was a year for breaking records in the U.S. hotel industry," said Caitlyn Milton, business intelligence manager of STR Analytics. "Supply, demand and average daily rate saw new highs, and hoteliers were able to control costs, helping to push absolute net income levels to new highs. Luxury and Upper Upscale hotels continued to lead the surge in profit, aided by steeper increases in ADR."
On a same-store, PAR basis, total revenue growth of 5.4 percent outpaced the increases of departmental and operating expenses, leading to a gross operating profit (GOP) increase of 9.0 percent. Operators continued to be successful in controlling expenses. Departmental and undistributed operating expenses saw modest increases of 3.8 percent and 2.8 percent, respectively.
"While we are seeing record profits in total dollars, income as a percent of revenue is still a bit shy of what the industry achieved in 2007," said Carter Wilson, director of STR Analytics. "I expect 2014 will be the year we will finally break 2007 levels."
Same-store hotels realized NOI increases of 10.0 percent in 2013. NOI does not include deductions for rent, amortization, depreciation or debt service.
The property most likely to experience a profit decline in 2013 was an Upper Midscale hotel (39% of all Upper Midscale hotels registered declines), while Luxury hotels were most likely to increase profit (89% of all Luxury hotels did).
Other highlights of the 2014 HOST Almanac:
Full-service hotels reporting to HOST achieved an average occupancy of 71.8 percent and an ADR of US$172.32 in 2013.
On average, full-service hotels generated US$271.78 in total revenue per occupied room (POR), up 5.4 percent from 2012. Full-service, chain-affiliated hotels checked in at US$266.06 on a POR basis, while independent properties reported US$335.58.
GOP for full-service properties was US$25,220 on a PAR basis, up 9.8 percent from 2012.
Overall in 2013, limited-service hotels reporting to HOST recorded an occupancy of 73.0 percent and an ADR of US$100.66.
Limited-service hotels reported a GOP of US$13,760 on a PAR basis, an increase of 6.0 percent from 2012.