U.S. hotel profitability reflects gains in corporate demand and groups
A recent increase in U.S. hotel labor costs reflects a normalizing business mix and significant gains in group demand
September labor costs were higher than the summer months even though overall demand was lower. That is consistent with leisure travel subsiding and corporate travel in peak season, according to STR.
On a per-occupied-room basis, F&B labor costs were up 9.8% year to date, which was the most of any department. That nearly double-digit increase supports the improvement in group business we have been reporting in the top-line metrics and aligns with weekday groups lifting the bottom line. Catering and banquet revenues jumped 20% year over year, another measure of the return of corporate and group demand.
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