The latest hotel industry analysis

Analysis by Eddie Yeung

Note: All financial figures presented in US$.

STR's global "bubble chart" update for the four weeks ending 15 June 2024 shows 65% of markets with year-over-year growth in revenue per available room (RevPAR). The percentage has remained between 60% and 77% with much of the world firmly positioned in a normalization period.

If you work in the hotel business, acronyms are part of the job. Among the many shorthand terms we use, two are particularly important for measuring performance. Their names might strike a similar chord, but delving into these respective metrics reveals crucial distinctions.

What is GOPPAR?

One of the hospitality industry’s key bottom-line metrics, gross operating profit per available room measures the relationship between hotel revenues and expenses. In general, the better you understand GOPPAR, the better you will be at turning revenue into profit. That is why it is important to benchmark your GOPPAR, along with the other key P&L metrics, on a consistent basis. 

Labor is typically one of the highest expenditures for hotels on average. The issue of acquiring labor became more complex during the COVID-19 pandemic, with many workers opting for employment in other sectors or not returning to the hospitality workforce after a period of layoffs and furloughs.

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 future booking levels in the marketplace.  

Hotel revenue management is the industry process that uses data and analytics to predict future guest behavior and demand. The objective of revenue management is to obtain a property’s maximum amount of overall possible revenue. 

Occupancy rate is one of the global hotel industry’s foundational performance metrics, showing the percentage of rooms occupied in a property, segment or geographic area for any given time.

What is Average Daily Rate (ADR)? 

Average daily rate (ADR), one of the three key hotel performance indicators (along with occupancy and

Good decisions can be made with high-level information. Optimal decisions come when you have comprehensive information. That is why hotel owners and operators are best positioned to grow their business when they gain detailed insight into the competition.

Analysis by Jean-Claude Pedjeu and Chris Klauda