After navigating through some dismal 9/11 and recession-induced doldrums, the U.S. hotel industry posted record revenues for 2004.
According to Hendersonville, Tenn.-based Smith Travel Research, the U.S. hotel industry generated profits of $16.7 billion on room revenues of $86 billion. Total revenues, meanwhile, hit $113.7 billion——an all-time high. In 2004, profits were 30.5% higher than in 2003, when the industry posted profits of $12.8 billion.
“With a RevPAR increase of 7.8% in 2004, hoteliers were able to lessen the impact of higher labor, insurance and fuel costs and built on their strong 2003 results,” says Randy Smith, co-owner and CEO of Smith Travel Research. “Of the roughly 1.6 billion room nights available, close to one billion room nights were sold in 2004 and we expect this strong performance to continue throughout 2005.”
Still, industry profits remain below the peak levels achieved in 2000 when gross operating profit (GOP) as a percentage of total sales hit 40.9% and profits topped $22.5 billion.