U.S. hotels enjoy profit growth, but becoming harder to achieve

While U.S. hoteliers enjoyed a ninth consecutive year of increasing profits in 2018, it is becoming increasingly difficult for managers to accomplish this task.  According to the recently released 2019 edition of Trends® in the Hotel Industry by CBRE Hotels Americas Research, total operating revenue increased by 2.6 percent in 2018 for the average hotel in its survey sample.  Managers were able to limit the growth in operating expenses to 2.8 percent, thus allowing for a 2.3 percent increase in gross operating profits (GOP) at the Trends® properties.  The 2.8 percent growth in expenses is less than the long-run average of 4.0 percent over the past 40 years.  However, it is greater than the 1.8 percent average annual growth rate achieved the past two years.

“With revenue growth forecast to slow down in the foreseeable future, owners and operators are beginning to wonder how much more juice is left to squeeze out of their ope