Dive Brief:
- In October, the hotel industry saw its largest year-over-year increases in gross operating profit per available room and total RevPAR since March of this year, with GOPPAR up 3.7% and TRevPAR up 4%, according to a new report from CoStar.
- New York City led all other U.S. markets in GOPPAR growth, up nearly 60% in October, the report details. Minneapolis, Atlanta, Dallas and Boston followed NYC in GOPPAR growth. Dallas took the top spot for TRevPAR growth.
- Improvement in group demand across CoStar’s top 25 markets, also including Seattle, Denver, Nashville and Chicago, drove U.S. hotel revenue and profit growth in October, according to the report.
Dive Insight:
The top 25 markets — the markets in the U.S. with the highest hotel room count — showed an 11% jump in GOPPAR year to date in October despite a 14% lift in labor costs, Audrey Kallman, research analyst at STR, said in the report. Eight of the markets experienced double-digit GOPPAR growth.
Food and beverage labor costs (on a per-occupied-room basis) showed the largest year-to-date growth of any department, signaling improvement in corporate demand, Kallman said. “This aligns with weekday group performance rebounding across the topline.”
New York City, which Kallman called “an obvious business-centric market,” experienced a 5.2% increase in group demand from the first to the second quarter of this year, Kevin Davis, Americas CEO of JLL’s Hotels & Hospitality Group, previously told Hotel Dive.
Dallas is also experiencing a resurgence of group travel demand, according to Brian Nordahl, EVP and Texas region leader for the CBRE Hotels Institutional Group.
“There’s more group business coming to Dallas than there has been in the past,” he previously told Hotel Dive, adding that people find Dallas to be a great location to meet because of the airports and strong hotel stock.
To keep up with heightened group demand, as well as increased leisure and business travel, Dallas has the largest hotel construction pipeline of any other U.S. market as of the end of 2023’s third quarter, according to Lodging Econometrics. And Atlanta, Nashville and several other top 25 markets follow closely behind Dallas in terms of development activity.
