US hotel industry profits grew in 2024, but increased labor costs and inflation limited growth, according to P&L data from CoStar.
2024 per-available-room metrics (% change from 2023)
- GOPPAR: US$73.60 (+3.2%)
- TRevPAR: US$209.67 (+7.2%)
- EBITDA PAR: US$51.88 (+2.5%)
- LPAR (Labor Costs): US$72.44 (+11.2%)
“Growth in total operating expenses, especially labor, has had the biggest impact on profits,” said Raquel Ortiz, senior manager of financial performance at STR.
“GOPPAR continued to slow at the end of the year with growth below the rate inflation. On the positive side, demand growth has been key to driving total revenues, which have been the best defense against high expenses and allowed for hotels to increase profits, albeit minimal. An increase in groups have helped improve F&B revenues, but not enough to mitigate the labor cost growth that has impacted margins.”
Labor costs have remained well above all other bottom-line metrics
Estimated total U.S. Revenues and Profits, 12MMA, Indexed YoY by month
Among the Top 25 Markets, Miami posted the greatest difference in GOPPAR (+$12) and TRevPAR (+$27). Oahu realized the largest drops in both metrics, likely due to lower demand caused by the labor strikes.
Most major markets were able to grow profits in 2024
Top 25 U.S. Markets, YoY difference, 2024
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
For more information about the company and its products and services, please visit www.costargroup.com
