A special report released on March 18 by HotStats regarding the hospitality sector’s performance has revealed that a “crushing blow” was dealt to the profitability of D.C. hotels during the 35-day government shutdown, which was between December 22, 2018 and January 25, 2019.
There was an 88.8 percent year-on-year drop in Gross Operating Profit Per Available Room (GOPPAR) for the market during the whole the month of January, according to the report by HotStats, a provider of monthly hotel profit and loss benchmark service for the hoteliers.
Several factors were responsible for the drop. The closure of the Smithsonian museums, the National Zoo, and the National Gallery of Art was among the contributing factors. The delays at Reagan National Airport and Dulles International Airport also played a role in the decline of four percentage points in occupancy to 54.5 percent, as per HotStats, compared to the same period in the previous year.
Apart from less occupancy, the market also reported a gradual decline across all revenue centers. TrevPAR suffered a year-on-year fall of 4.9 percent to $161.95
“The two percent increase in average room rate over that period, to $191.02, was not enough to offset declining occupancy, leading to a year-over-year drop of 4.9 percent in RevPAR to $104.17,” according to the report.
The report adds that the government shutdown also resulted in the cancellation of several events in D.C, including the 2019 S&T Cyber-security and Innovation showcase, and the 2019 AGA Financial Systems Summits. Both these events were rescheduled to March from their earlier dates in January.
“This took a heavy toll on all departments, especially food & beverage through conference and banqueting, with a 17.7-percent YOY plunge in room hire revenue per square foot. The bleak results for that same period of Food RevPAR (down 3.9 percent) and Beverage RevPAR (down 15.0 percent) also contributed to the 6.9-percent fall in total F&B RevPAR to $48.71,” the report states.
The report also found that D.C. hoteliers were not that successful in keeping down the expenses per available room. As the city returns to normal events after the end of the government shutdown, D.C. hoteliers are hoping for better results that will somewhat compensate for the losses suffered during the shutdown in January.
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