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Despite Global Pressures, April Hotel Profit Up

The higher cost for goods is not yet wrecking traveler appetite. Despite record gas prices, ballooning airfares and crippling inflation roiling the globe, hotel performance remained widely steady, if not getting better, in April, with increases in both the top and bottom line, according to HotStats.

In the U.S., April gross operating performance per available room (GOPPAR) hit $96.08, which was 92% back to where it was pre-pandemic. Accounting for the rise was a strong top line that featured both growth in occupancy and average daily rate, with the latter outpacing where it was in April 2019, $5 higher on a nominal basis.

Total revenue per available room (TRevPAR) was recorded at $226, which was still $40 off where it was pre-pandemic, April 2019.

Though profit is driving forward, expense pressure continues to be a thorn in hotel operators’ sides. Total payroll continues to rise as nettlesome labor shortages plague hotels going into the important summer season. Payroll stood at $66.50 per available room in April, $46 higher than where it was in April 2020 at the height of global lockdowns, but still around $20 less that where it was pre-pandemic.

Europe in Recovery Mode

Though Europe remains below the U.S. in regard to performance on a pure currency basis, it is still seeing a continual performance rise in its metrics. The continent is now showing a V-shaped recovery along most revenue and profit metrics after a precipitous dip from October 2021 to January 2022. Since then, things have improved.

TRevPAR hit €142 in April 2022, which remains well below April 2019, but is up 390% year-over-year, a result of both a jump in RevPAR and ancillary revenue delivered by food and beverage.

GOPPAR was up to €40 in the month, which is climbing, but still well in recovery mode and around €11 off its pre-pandemic number. It’s a far cry compared to April 2021, when GOPPAR turned negative.

Expo 2020 Hangover

After an exemplary March, the Middle East came back down to earth in April, but is still pumping out strong month-over-month performance. On the back of Expo 2020, in Dubai, the region pushed to new performance highs, but now that the six-month event has closed, the Middle East will look for other ways to extend its success.

Occupancy across the region was down some 20 percentage points over the month prior, but ADR remained high at $245, which is the highest it’s been in more than four years and $71 higher than April 2019.

ADR-led RevPAR amounted to $133, which was $20 off March, but $2 higher than in April 2019.

Dubai RevPAR was at its lowest since the start of Expo 2020 and $20 lower than April 2019. GOPPAR fell with it to $106, $22 lower than April 2019.

A still strong top line led to solid bottom-line numbers across the Middle East as a whole, with GOPPAR of $85 only $2 off its April 2019 level.

Locked-Up China

With parts of China still under lockdown due to COVID-19, Asia-Pacific performance took a hit. For the second consecutive month, China GOPPAR was in negative territory at $-4.31. The good news for hoteliers is that after a two-month lockdown in Shanghai, the city is now moving to end it as of June 1.

After hitting an occupancy high of 65% in July 2021, the metric was recorded at 33% in April 2022, the lowest it’s been since February 2021.


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