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Rising Hotel Profits Show No Signs of Slowing in the U.S.

Excerpt from Hotel News Now

May 28, 2014 2:02 pm

Skift Take

Increased profits are being driven by rising rates rather than higher occupancy providing hotels the opportunity to boost revenue even more through ancillary services and promotions.

— Samantha Shankman

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A hotel employee pushes a baggage cart. Jason Kuffer / Flickr


Industry profits in 2009 totaled $24.5 billion, according to Hotel Operating Statistics, or HOST, Almanac from STR Analytics, a sister company of Hotel News Now. During 2013, profits stood at $41 billion, a 67.3% increase from 2009. During the same period, industry revenues grew nearly 30% to $163 billion from $125.5 billion.

Profit growth at this point in the cycle is being sparked by rate growth rather than occupancy, so everything is being driven directly to the bottom line, said Robert Mandelbaum, director of research information services at PKF. He said the industry is in a “sweet spot” as it relates to the level of hotel profits.

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