Hotel Industry Continues to Improve Despite Rising Prices

Despite financial unease, the hotel industry is continuing to thrive. Prices and occupancy are up around the world even though consumer costs for everything continue to climb.

The latest research from HotStats found that the industry was producing strong numbers. Occupancy rates are up in Europe, the United States is nearing pre-pandemic levels and China is showing signs of life.

In the U.S., after steep inclines between January through March, the market is beginning to level off. HotStats research revealed that the country could be hitting a plateau, however, performance is within 10 percent of pre-pandemic levels.

In May, the U.S. hit $227 RevPAR, which was on par with the previous month but down $40 from May 2019, according to the HotStats report.

Total revenue was buoyed by strong numbers in the rooms department led by average daily rates that are above pre-pandemic levels. Corporate travel is also showing steady improvement, and HotStats found that the corporate revenue mix percentage in May is now 3 percentage points off its May 2019 comp.

Gross operating profit per available room (GOPPAR) was above $90 in March and has stayed about that level since.

Europe is showing occupancy rates that are the highest since November 2019. ADR is also now on par or higher than before the pandemic. May 2022 European ADR was $30 higher than in May 2019 and is now up 127 percent since its all-time low in May 2020, according to HotStats.

Ancillary revenue also rose and is now just $6 off of its May 2019 level. GOPPAR is also now at the same levels of 2019.

The Middle East, which saw soaring profits in March, has declined for two months. However, the region continues to track above pre-pandemic levels and the dip is likely more to do with seasonality than COVID-19 or other factors, according to HotStats.

GOPPAR hit $73 in May, a full $16 higher than in May 2019.

China is showing signs of life after COVID-19 lockdowns largely shut the region down. Occupancy is still way down but moved up 6 percentage points in May over April. Rates have sunk, however, and are now $23 lower than in May of 2019.

HotStats noted that the good news is that as travel returns, so too will hotel industry performance.