News for the Hospitality Executive
In 2006, the average hotel manager in our 71st Trends in the Hotel Industry survey achieved a 13.3 percent gain in operating profits1, the third consecutive year of bottom-line increases in excess of ten percent. Favorable supply / demand conditions allowed these operators to enjoy an 8.2 percent jump in revenues for the year. However, management continued to struggle with escalating costs. Hotel operating expenses grew 6.3 percent in 2006, the third consecutive year of expense growth nearly twice the pace of inflation.
These finding are based on the recently released 2007 edition of Trends in the Hotel Industry. To monitor lodging industry revenues, expense, and profits, PKF Consulting has collected and analyzed U.S. hotel operating statements since 1936. This year’s report is based on a sample of over 5,000 full-service, limited-service, resort, all-suite, and convention properties located throughout the nation.
The following paragraphs highlight the major findings from this year’s survey:
RevenueModeration In The Future
In the July 2006 issue of Lodging magazine, PKF Hospitality Research forecast revenue growth of 7.6 percent for 2006, along with a 14.9 percent gain in profitability - pretty close to the results that were actually achieved. Looking towards the end of 2007, our forecast calls for a 4.7 percent increase in revenues and a 6.5 percent boost in profits. For reference purposes, the long-term (1960 to 2006) average annual change in revenue is 4.5 percent and 4.7 percent for profits. As history has proven, the lodging industry is cyclical and performance will eventually revert to the mean.
1Income before deductions for capital reserve, rent, interest, income taxes, depreciation, and amortization.
To view the full results of the 2007 Trends in the Hotel Industry survey, you can purchase a copy of the report from our web store at www.pkfc.com. Alternatively, call Claude Vargo or Josh Malnight at (866) 842-8754.
|Also See:||Budgeting For 2007? Hotel Revenues, Expenses, and Profits All Up / PKF / July 2006|
|Budgeting For 2007? Hotel Rooms Will Be Easier, But Not Easy, To Find / PKF / July 2006|
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