REGIONAL REPORT
revenue expansion trend .
Despite the TRevPAR growth across the board , most states achieved lower margin results in 2023 when compared to 2022 . This raises concerns over the ability of hotels to contain costs as revenue grows . Of particular concern are Florida ,
TRevPAR % Change vs GOP Margin % Change Jan - Jul : 2023 vs 2022
GOP Margin % Change
20 %
15 %
10 %
5 %
0 %
-5 %
TX
California , Ohio , Illinois and Washington : They have the greatest margin decreases of the sample , ranging from 7 % to 5 % below 2022 levels . The state of New York , on the other hand , again stands out for its margin improvement .
There is a direct link between the YOY
FL WA
OH IL CA
-10%
0 % 5 % 10 % 15 % 20 % 25 % 30 %
AZ
MA
TRevPAR % Change
LA
GA
NY
PA margin results and the evolution of labor costs in the same period . In the case of New York , while still exhibiting the greatest labor cost percentage of the sample , it was also the only state where that percentage declined in 2023 , by 2.5 percentage points , as Figure 5 shows . On the other end of the spectrum , it is no surprise that Florida , California , Washington , Ohio and Illinois experienced the greatest percentage point increases .
No matter how we slice and dice the data , there is a clear takeaway from the results : Profitability is not a by-product of revenue . Even with an expanding YOY top-line , cost creep , particularly in labor , is eroding margins . In this context , it is ever more pressing for hoteliers to understand where they sit within their competitive landscape and enter budgeting season with a full understanding of how each dollar they allocate to specific expense lines will help not only drive value for guests , but contribute to optimizing flow-through and owner returns .
Total Labor Costs as a % of Total Revenue Jan - Jul : 2022 and 2023
60.0 %
50.0 %
40.0 %
30.0 %
20.0 %
10.0 %
0.0 %
-10.0%
-20.0%
-30.0% NY MA GA AZ PA TX LA IL OH WA CA FL
6.00
5.00
4.00
3.00
2.00
1.00
0.00
-1.00
-2.00
-3.00
2022 2023 Percentage Point Difference
44 hotelsmag . com October 2023