The Role of Profitability Data in a Comprehensive Hotel Benchmarking Experience
Sunday, 19th November 2023

Hotel owners and operators are best positioned for success when they measure their business from every angle.

That is why no benchmarking experience can be considered comprehensive without frequent insight into the bottom line.

Those hoteliers who benchmark with STR find the data sets and analytics needed to cover the full hotel lifecycle, with monthly profitability features providing vital intelligence for building and executing investment and operational strategies.

The end result? Improved operational efficiency and maximum hotel profitability.

The metrics

Derived from nearly 150 data points across P&L statements, key metrics are drawn per available room night (PAR), per occupied room (POR), and as a percentage of total revenues.

Key PAR indicators include:

  • Total revenue per available room (TRevPAR)
  • Gross operating profit per available room (GOPPAR)
  • Earnings before interest, tax, depreciation, and amortization (EBITDA)
  • Labor costs per available room (LPAR).

In addition to your ability to analyze individual and summary benchmarks, STR provides further analysis with flow through (ability to translate revenue to profit) and department-level metrics.

Who uses hotel P&L data? How does it support strategies?

P&L data informs better business decisions across the full spectrum of industry disciplines and stakeholders. Here are some of the more common examples:

  • Owners manage their profit and assess the overall health of their business against the competition. They understand GOPPAR to create better flow through. They focus on GOP margin to implement departmental efficiency controls.
  • Commercial brand teams gain visibility over their operating and labor costs relative to revenues as well as the conversion of revenues to profits given an occupancy or rate-driven strategy.
  • Franchise support teams can identify standout performers and those properties that need support to grow profit through operational adjustments.
  • Finance teams use profitability data to review expenses, monitor operating patterns and maximize profit for each hotel and their portfolio. Collectively with their development team, a finance team can also demonstrate to prospective franchisees a brand’s ability to generate higher average returns and/or calculate potential franchise fee revenues for differing types of industry aggregates.
  • Development teams rely upon profitability metrics as one of their data sets for conducting market and project feasibility analysis.
  • Investors use P&L data to gauge the financial health of a property when deciding whether to buy, sell or renovate.

Read the full article here

CoStar is a leading provider of online real estate marketplaces, information and analytics in the property markets. For more information about the company and its products and services, please visit www.costargroup.com.

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