trends in the hotel industry

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trends in the hotel industry

U.S. Hotels Enjoy Profit Growth, But It Is Becoming Harder to Achieve

CBRE | April 29, 2019

Atlanta – April 29, 2019 – While U.S. hoteliers enjoyed a ninth consecutive year of increasing profits in 2018, it is becoming increasingly difficult for managers to accomplish this task. According to the recently released 2019 edition of Trends® in the Hotel Industry by CBRE Hotels Americas Research, total operating revenue increased by 2.6 percent in 2018 for the average hotel in its survey sample. Managers were able to limit the growth in operating expenses to 2.8 percent, thus allowing for a 2.3 percent increase in gross operating profits (GOP) at the Trends® properties. The 2.8 percent growth in expenses is less...

Unit-Level Hotel Marketing: P&L Reveals Changes In Department Functions

CBRE | February 22, 2019

By Robert Mandelbaum and Viet Vo Technology, online intermediaries, social media, revenue management software, shared-services, and the proliferation of market intelligence reports have reshaped the way hotel Sales and Marketing Departments conduct business. The traditional organizational structure of assigning personnel by demand segments (commercial, group, leisure) has given way to assignment by function (revenue management, social media, channel distribution, customer relationship management). According to one industry executive, most of the "selling" of hotel rooms has moved from the property level to corporate and regional offices...

Cost Controls Perpetuate U.S. Hotel Profit Growth In 2017

Robert Mandelbaum | July 17, 2018

By Robert Mandelbaum U.S. hoteliers enjoyed an eighth consecutive year of increasing profits in 2017 despite another slowdown in the rate of revenue growth. According to the 2018 edition of Trends® in the Hotel Industry, total operating revenue increased by 2.0 percent in 2017 for the average hotel in its survey sample. Fortunately, by limiting the growth in operating expenses to 1.9 percent, managers at the Trends® properties realized a 2.2 percent increase in gross operating profits (GOP) for the year. Trends® in the Hotel Industry is the CBRE Hotels' Americas Research's annual survey of operating statements from thousands...

U.S. Hotels Operating at Highest Level of Efficiency Since 1960

CBRE Group, Inc. | April 18, 2018

Cost Controls Perpetuate Profit Growth Atlanta – April 18, 2018 – U.S. hoteliers enjoyed an eighth consecutive year of increasing profits in 2017 despite another slowdown in the rate of revenue growth. According to the recently released 2018 edition of Trends® in the Hotel Industry by CBRE Hotels' Americas Research, total operating revenue increased by 2.0 percent in 2017 for the average hotel in its survey sample. Fortunately, by limiting the growth in operating expenses to 1.9 percent, managers at the Trends® properties realized a 2.2 percent increase in gross operating profits (GOP) for the year. "It is becoming i...

Measuring the Investment in Training

Robert Mandelbaum | March 19, 2018

By Robert Mandelbaum In 2016, the average property in our Trends® in the Hotel Industry survey sample spent 31.3 percent of its total revenue, or 42.8 percent of its total operating expenses on labor costs. This includes the salaries, wages, benefits, service charges, and bonuses paid to employees, as well as payments made for contracted labor. By far, labor related costs are the largest operating expense for hotels regardless of property type. Not only is labor a large expense, but it is a growing expense. According to the Bureau of Labor Statistics, the average total compensation for U.S. hospitality employees has increased more t...

How the Composition of RevPAR Growth Impacts Changes in Profits

Robert Mandelbaum | December 18, 2017

By Robert Mandelbaum To project changes in profits we obviously need to look at the expected relative changes in revenues and expenses. Profit growth can only be realized when the dollar value of the change in revenue exceeds the dollar value of the change in expenses. Within the lodging industry, there are other metrics that have historically been reliable indicators to measure the potential for hotel profit growth. One is the change in rooms revenue, or RevPAR. Using data from our annual Trends® in the Hotel Industry, we find an 86 percent correlation between annual changes in RevPAR and Gross Operating Profit (GOP) from 1960 to 2...

U.S. Hotel Profits Grow in 2016 Despite Slowdown in Revenue

CBRE Hotels | April 25, 2017

Atlanta – April 25, 2017 – U.S. hoteliers enjoyed a seventh consecutive year of increasing profits in 2016 despite a slowdown in the rate of revenue growth. According to the recently released 2017 edition of Trends® in the Hotel Industry by CBRE Hotels' Americas Research, total operating revenue, driven by a 0.2 percent rise in occupancy and a 2.5 percent growth in average daily rate (ADR), increased by 2.4 percent in 2016 for the average hotel in its survey sample. However, by limiting the growth in operating expenses to just 1.6 percent, managers at the Trends® properties were able to extract a 3.7 percent increase...

Hotel Rooms Departments Struggle to Control Expenses

the Authors | March 13, 2017

By Robert Mandelbaum and Gary McDade Changes in rooms revenue per available room (RevPAR), and RevPAR penetration receive a lot of attention from hotel managers. This is because the monies hotels receive from renting guest rooms is the major source of revenue across all property types in the U.S. According to the 2016 edition of Trends® in the Hotel Industry, rooms revenue averaged 68.1 percent of total operating revenue in 2015. This metric exceeds 97 percent at limited-service and extended-stay hotels. Alternatively, rooms revenue comprises only 51.8 percent of total revenue at resorts. Even more impressive than the contribution o...

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