Coronavirus and Meetings
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Hotel profits in the United States fell 101.7 percent in March, according to lodging-data provider STR, and the numbers aren't yet getting any better in the Asia-Pacific, according to hotel benchmarking service HotStats. In fact, the impact of COVID-19 on hoteliers in that region appears to be intensifying, contributing to a 117.8 percent drop in gross operating profit per available room for March, after breaking even in February.
The STR numbers come from the organization's inaugural monthly profit-and-loss report for the hotel industry. While GOPPAR plummeted 101.7 percent year-over-year, to $-2.10, total revenue per available room fell by 64 percent, to $104.93. Meanwhile, EBIDTA per available room (earnings before interest, income tax, depreciation and amortization) plunged by 116.8 percent for the month, to $-15.44. Due to such low occupancy and temporary closures, total labor costs per available room fell by 31.2 percent, to $66.16.
"Just a few months ago, we were talking about 2020 being a challenging year for profitability, given flattening occupancy levels and a lack of hotelier pricing power," pointed out Joseph Rael, STR's senior director of financial performance. "Now we’re at a point where thousands of properties have closed around the country due to their inability to operate at any level of profitability."
Among the top U.S. markets, New York reported the steepest GOPPAR decline, at -203 percent, followed by Chicago (-201.4 percent) and Seattle (-158 percent). When broken down by hotel class, upper-upscale saw the worst drop in GOPPAR, at -108.1 percent. Upper-upscale properties are typically very dependent on group business, which has come to a halt during the pandemic.
In the Asia-Pacific, the GOPPAR free fall set a regional record, surpassing the 98.9 percent drop noted in February, according to HotStats. For the first quarter, profits were down 80.5 percent year-over-year.
March RevPAR fell 76.1 percent year-over-year, on account of a 51.1 percent drop in occupancy, to 20.3 percent. That was actually 10 percentage points below February's occupancy. March total revenue fell by a record-setting 75.3 percent.
Interestingly, in Seoul, South Korea, which has had relative success in stemming the number of COVID-19 cases, hotel profits plunged by a dramatic 178.7 percent year-over-year for the month of March -- the highest drop in the region.
Singapore, which now has the highest number of coronavirus cases in Southeast Asia, due to the monitoring of an outbreak among the migrant community, reported a 109.6 percent drop in profit for the month -- down significantly from February, when GOPPAR was still in positive territory.