Slowing profit growth
GOPPAR – 12-month rolling average – USD
Flow-Through Challenges
Incremental expenses by category – YTD July 2025 – Americas and Europe
A matter of scale
GOP Margins – YTD July 2025 and YTD July 2024 – United States by brand scale
trailing their YTD 2024 performance. The exceptions are ultra-luxury hotels( up 1.1 points in GOP margin) and luxury hotels( down just 0.1 points). These segments benefit from multiple revenue streams and facilities that attract both overnight guests and local spend.
Across the board, payroll continues to climb while occupancy slows, squeezing margins further. Even ultraluxury hotels, which reported a 7.5 % increase in TRevPAR, saw payroll per-availableroom grow 8.3 %, eroding profitability gains. Hotels with smaller opportunities for ancillary revenue, such as midscale properties, are struggling the most. With limited additional revenue sources, they remain highly vulnerable to declining occupancy and rising labor costs.
Overall, the data show that while global profitability has leveled out, the Americas remain under pressure as rising costs outpace revenue growth, especially for lowerend brand scales. This raises a key question for hoteliers: How can operators rebalance cost structures, particularly labor, while finding new revenue streams to sustain profitability in a slowing market?
It’ s one where data-led benchmarking can provide answers. By understanding how peer properties manage costs and capture revenue, operators can uncover strategies that directly improve margins.
November 2025 hotelsmag. com 79