Hendersonville, Tenn.—Despite the downturn in the U.S. economy, the hotel industry posted record pre-tax income and revenue in 2007, according to the recently released 2008 Hotel Operating Statistics (HOST) Study issued by Smith Travel Research (STR).
Pre-tax income for the U.S. hotel industry increased 5.3 percent from 2006 to $28 billion in 2007. The industry also posted an all-time best $139.4 billion in revenue last year, which is $6 billion more than it generated in 2006.
“(The U.S. hotel industry) made more revenue and more profit than we ever had before,” said Jan D. Freitag, vice president at STR. “Both numbers were unprecedented.”
Freitag said that the increase in both measures is probably related to increases in average daily rate, which increased 6 percent in 2007 over 2006.
The 2008 HOST Study comprises a database of operating statements from more than 5,200 hotels throughout the U.S.
“It’s the only publication that offers a comprehensive look at total industry revenue and total industry profitability,” Freitag said.
In additional to the record-setting measures of revenue and profit, the study also found that year-over-year Gross Operating Profit (GOP) during 2007 increased 3.8 percent for full-service hotels in the U.S and decreased 3.4 percent for limited-service hotels in the U.S.
Despite mostly favorable findings in 2007, Freitag said the hotel industry will likely travel down tougher roads in the future.
“The lodging industry is facing some rougher sailing ahead,” he said. “How those particular results [revenue and pre-tax income] translate into operating performance in 2008 is going to be an interesting development that we’re gong to monitor closely.”
HOST Study press release from STR