financeHotels Magazine··1 min·For: Owner, GM, Revenue, Ops, Investor
Rising Costs and Lower RevPAR Erode Hotel Profit Margins
New data from LW Hospitality Advisors highlights how rising operating expenses and a 0.3% dip in RevPAR have led to profit margin erosion, particularly across limited-service and full-service segments.
Key Takeaways
- 1Monitor property tax increases which surged by 5.9% YOY, acting as the primary driver of margin erosion between GOP and NOI.
- 2Address rising costs in the Rooms department, particularly in full-service hotels where expenses rose 4.2% YOY on a per-occupied-room basis.
- 3Implement disciplined expense management to offset enervated RevPAR growth, which fell 0.3% in 2025 according to CoStar data.
Source: Hotels Magazine
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