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STR: US hotel revenues reach all-time high

Even though records were set in each category, STR’s Consulting & Analytics team notes that growth was much lower than the levels experienced in 2015. House profit increased 4.0% compared with 11.1% in 2015. Total revenues increased 4.5% in 2016 after rising 8.1% in 2015.

BROOMFIELD, Colorado – Results from STR’s 2017 HOST Almanac indicate that U.S. hotel industry revenue and house profit reached all-time highs in 2016. 

Revenues topped an estimated US$199 billion in 2016, increasing nearly US$9 billion from 2015. Total industry-wide house profit exceeded US$76 billion, a per-available-room increase of 2.0% from 2015. 

Even though records were set in each category, STR’s Consulting & Analytics team notes that growth was much lower than the levels experienced in 2015. House profit increased 4.0% compared with 11.1% in 2015. Total revenues increased 4.5% in 2016 after rising 8.1% in 2015.  

"Inflation-adjusted revenues topped the previous peak, and real house profit levels were the second-highest we’ve seen,” said Joseph Rael, STR’s director of financial performance. “However, in the past year, we’ve also seen revenue growth slow considerably throughout the country. With RevPAR (revenue per available room) growth forecasted below 3% for the next couple of years, we only expect modest profit increases in the short term."

The following chart details U.S. hotel industry profitability (per-available-room) on an inflation-adjusted basis from 1990 to 2016. In real terms, 2016 total revenues surpassed the levels realized in 2000, which was the previous peak.  The inflation-adjusted house profit realized in 2016 was the second-best profit level during the 27-year period. 

Please note that this data is extrapolated using rooms revenue data for those hotels reporting to STR, as well as profitability data from properties reporting to the HOST P&L program. Also, house profit is defined as profit before deductions for non-operating income, expenses and management fees.

 

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