U.S. hotel profitability reflects gains in corporate demand and groups

WASHINGTON – 8 November 2023 – A recent increase in U.S. hotel labor costs reflects a normalizing business mix and significant gains in group demand, according to September year-to-date P&L data from CoStar. CoStar is a leading provider of online real estate marketplaces, information and analytics in the property markets.

September 2023 YTD per-available-room metrics (% change from September 2022 YTD)

• GOPPAR: US$75.74 (+6.2%)
• TRevPAR: US$208.34 (+8.6%)
• EBITDA PAR: US$52.95 (+5.1%)
• LPAR (Labor Costs): US$69.36 (+13.1%)

“September labor costs were higher than the summer months even though overall demand was lower. That is consistent with leisure travel subsiding and corporate travel in peak season,” said Raquel Ortiz, STR’s director of financial performance.

“Revenue metrics have wavered month to month, but growth in labor costs has remained consistent,” Ortiz said. “On a per-occupied-room basis, F&B labor costs were up 9.8% year to date, which was the most of any department. That nearly double-digit increase supports the improvement in group business we have been reporting in the top-line metrics and aligns with weekday groups lifting the bottom line. Catering and banquet revenues jumped 20% year over year, another measure of the return of corporate and group demand.”

Profit levels in the major markets are further evidence of business travel and groups. Overall, 13 of the Top 25 markets posted double-digit growth in GOPPAR through September, led by New York City and Oahu.

“Roughly 60% of hotel industry revenue growth in the past six weeks is from weekdays, with the major markets leading the way,” said Ortiz. “Additionally, U.S. group demand has risen by an average of 3.1% year over year since Labor Day.”

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Key profitability metrics:

TRevPAR - Total revenue per available room

GOPPAR - Gross operating profit per available room

EBITDA - Earnings before interest, income tax, depreciation, and amortization

LPAR - Total labor costs per available room

Additional Performance Data
CoStar’s world-leading hotel performance sample comprises 78,000 properties and 10.3 million rooms around the globe. Members of the media should refer to the contacts listed below for additional data requests.

News Media Contact
Haley Luther
Communications Manager – STR
(216) 278-0627
hluther@str.com

About CoStar Group
CoStar Group (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics in the property markets. Founded in 1987, CoStar Group conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of real estate information. CoStar is the global leader in commercial real estate information, analytics, and news, enabling clients to analyze, interpret and gain unmatched insight on property values, market conditions and availabilities. Apartments.com is the leading online marketplace for renters seeking great apartment homes, providing property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked online commercial real estate marketplace with over twelve million monthly global unique visitors. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X offers a leading platform for conducting commercial real estate online auctions and negotiated bids. Homes.com is the fastest growing online residential marketplace that connects agents, buyers, and sellers. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. Business Immo is France’s leading commercial real estate news service. Thomas Daily is Germany’s largest online data pool in the real estate industry. Belbex is the premier source of commercial space available to let and for sale in Spain. CoStar Group’s websites attract nearly 100 million unique monthly visitors. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time, we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.