După ce a ajuns la fund, industria hotelieră globală revine

Though the global hospitality industry is still in critical condition, it appears to be coming off life support and moving to intensive care, given the extraordinary circumstances foisted by Covid-19.

And as parts of the world reopen and more hotels receive guests, the performance data should continue to improve, absent any new wave of infection, which is not entirely ruled out.

But as of May, and on a month-over-month (MOM) basis, performance is either stabilizing or picking up. April, fingers crossed, was the bottom.

U.S. Eases Into Reopen

In the U.S., between April and May, total revenue per available room (TRevPAR) was up 39% (down 92% year-over-year) and gross operating profit per available room (GOPPAR) was up 32% to $-17.25 (down 116.2% YOY).

Absent a surge in cases, which is a possibility, the expectation is that MOM numbers will continue to improve, especially as more states move into Phase Two, which allows for non-essential travel to commence and sets out certain guidelines, like these, should hotels decide to reopen.

Occupancy and room rate in May remained well off 2019 levels, but did climb 4 percentage points and 5%, respectively, from April. May RevPAR of $13.76 (down 92.2% YOY) was up 54% from April and down 79% from RevPAR of $66.27 in March, the first month that COVID-19 impact showed up in hotel industry performance numbers.

Further and expected YOY expense drops showed up in the data, as many hotels remained closed or operated at limited capacity. Labor costs on a per-available-room basis were down 74.4% YOY, while utility costs were down 45% YOY. Anecdotally, the expectation is that water bills will rise due to increased laundry operations and additional and more frequent washing of things like linens due to cleaning protocols. One hotelier said that his water bill was already up 33%.

Profit margin was -87.3% of total revenue, up 93 percentage points from April, but down 125 percentage points from the same time a year ago.

Profit & Loss Indicators — U.S. (in USD)

Europe Bottoms Out

Europe passed the peak of coronavirus infections in early May, according to the European Center for Disease Prevention and Control (ECDC). As several countries started to loosen some lockdown restrictions, profit-per-available-room declines showed a significant deceleration on a MOM basis. GOPPAR in May was down 1.2% compared to April and even though GOPPAR remains 125.5% below May 2019, this reduction is an indicator that the region hit its bottom.

Occupancy recorded an uptick of 1.3 percentage points MOM to 7.3%, which resulted in a 17.9% MOM increase in RevPAR. These results are still far from the numbers recorded in May of the previous year, but they are the first signs of recovery in the region. The closure of most ancillary revenue streams fueled the 5.4% MOM decline in TRevPAR, which equals a 94.2% YOY slump.

Labor costs accompanied the hike in occupancy, recording a 1.2% MOM expansion, while overhead costs were cut by 0.9% MOM. Profit conversion in May was recorded at -166.1% of total revenue, down 11.1 percentage points from April and off from 37.8% in the same month of the previous year.

Profit & Loss Indicators — Europe (in EUR)

APAC Upturn

Like other regions, Asia-Pacific appears to have bottomed out and is now clawing its way back little by little. May results show the first MOM upticks for both top-line and bottom-line metrics since December 2019. GOPPAR for the region took a 78.2% MOM jump, and at -$3.04 is making strides toward breaking-even after turning negative in March.

Occupancy almost reached 30% in May, and at 26.6% was a 7.4-percentage-point increase compared to April. And even though this is still 43.6 percentage points below May 2019 numbers, it’s the first time since February that occupancy has placed above 25% in the region. This rise in volume drove the 39.5% MOM surge in RevPAR. Further contributing to the top-line, F&B revenue per available room was up by 89.8% MOM, resulting in a much needed 48.1% MOM expansion of TRevPAR.

Despite top-line growth, hoteliers in APAC were able to avoid cost creep and managed to reduce labor costs and overheads by 6.7% and 1.3%, respectively, on a MOM basis. As a result, profit conversion in May was recorded at -7.5% of total revenue, placing 43.4 percentage points above the previous month.

Profit & Loss Indicators — APAC (in USD)

Middle East Momentum

May saw MOM jumps for the Middle East in both total revenue and profitability. RevPAR in the region dropped off precipitously after February, and in May it hit $23.03, which, though 78.4% down from the same time a year ago, was up 5.9% over April, underpinned by a 5-percentage-point uptick in occupancy. Though occupancy was up in the month, average rate decreased 14.5% in May over April, a sign that hoteliers in the region are resigned to sacrifice rate in order to build back occupancy.

TRevPAR a crescut cu 10.5% în luna față de luna anterioară, susținut de veniturile din F&B, care au înregistrat o creștere a MOM cu 25%.

Cheltuielile au continuat să scadă, inclusiv cu forța de muncă și cheltuielile generale totale, cu 50.6% și, respectiv, cu 50.5% față de anul trecut. Între timp, pe baza MOM, costurile cu forța de muncă și cheltuielile generale au fost relativ statice, un semn al unei industrie care se echilibrează pe fondul unei reveniri lente la normalitate.

După pragul de rentabilitate în martie, GOPPAR a căzut în teritoriu negativ în câteva luni după aceea. În timp ce luna mai a rămas negativă în dolari, a fost cu 20% mai bună decât aprilie. Este încă în scădere cu 120.8% față de anul trecut.

News that Saudi Arabia will only allow around 1,000 pilgrims residing in the kingdom to perform the Hajj in July will be a huge blow to the Middle East’s overall numbers. Some 2.5 million pilgrims from around the world visit the cities of Mecca and Medina annually for the week-long ritual scheduled to begin in late July.

Marja de profit a crescut cu 13 puncte procentuale în mai față de aprilie, până la -34.8% din veniturile totale.

Profit & Loss Indicators — Middle East (in USD)

Rezumat
May is the light at the end of the tunnel that hoteliers across the globe have been in search for. A glimmer of hope that revenue and profit, though still mightily depressed, are at least turning around.

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