There’s only one word to describe the U.S. hotel industry today: It is not clear whether this will be the case.. As we head into 2025, the hotel industry is faced with several critical questions. How resilient will demand be? Costs are rising, will they continue to rise? And most importantly—how can we maintain profitability in a market that feels, well, unpredictable?
At HotStats, we believe that in volatile times, data isn’t just helpful—it’s essential. We’re digging into our insights to help you. Profit is everything Performance trends for early 2025 and the annual review. Here’s what we’re seeing—and what you should be watching.
Revenue Is Up—But Where’s the Profit?
The U.S. hotel industry is expected to grow modestly in 2024. The occupancy rate increased, and the guests spent more. Profitability did not increase along with revenue. In fact, it declined.
Gross Operating Profit per Available Space (GOPPAR) and all other key margins have fallen year-on-year. The main culprit? Costs—especially labor.
Labour Costs: The Flow Through Disruptor
U.S. hoteliers will have to pay an additional $1.04 for each $1 increase in top line revenue in 2024. The incremental labor expenses accounted for $0.75. The math doesn’t lie—rising staffing costs are eating into margins, leaving little room for error and even less for growth.
Fighting Margin erosion: the New Operational Normal
It’s no longer just about generating more revenue—it’s about generating it profitably. In the last 14 months, margin contractions have become the norm. Only two months showed positive growth year-on-year.
Revenue growth is not enough. Hoteliers must turn their attention inward—optimizing operations, controlling costs, and rethinking efficiency strategies—to protect what really matters: profitability.
All Segments Feel the Pressure
Not all hotels have the same revenue stream.
The upper-upscale and luxury segments have benefited from the resilient demand, return of group travel and growing appetite for premium experiences.
Midscale and economy properties also feel the pressure as inflation-weary travellers tighten their budgets.
Despite divergent trends on the top-line, profit margins across the board are under pressure. Cost control and strategic planning is now a must for any business, whether it’s a five-star hotel or a roadside tavern.
Benchmarking your GPS in fog
When the future seems uncertain, benchmarking can be a very powerful tool.
It’s not just about comparing numbers—it’s about understanding how top performers are adapting, evolving, and succeeding. Operational Benchmarking brings clarity to complexity by:
- Underperformance and overperformance in specific areas can be identified
- Analyze across all revenue streams—not just rooms
- Profits are important, but not only revenue
- Data-driven business cases that are stronger
It is no longer true that you can simply grow revenue and profit will follow. You need to be more proactive today. You can also plan to use for profit—and benchmarking is the most effective way to do it.
Your Roadmap to Success
In a world defined by uncertainty Operational benchmarking is the roadmap for you. At HotStats, we equip hoteliers with the P&L insights they need to succeed—whether that means adjusting staffing levels, realigning service offerings, or making smarter budget calls.
Make sure that your hotel doesn’t only survive but thrives.
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Laura Resco
Sales Account Manager at HotStats Limited
HotStats Limited
