Hotel profit margin, which measure profits as a percent of revenue, is considered a good indicator of the efficiency of hotel operations. In 2023 and 2024, hotel profit margins at both the Gross Operating Profit (GOP) and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) level have declined, indicating that both operating and ownership expenses have increased at a greater pace than revenues. Based on CBRE’s February 2025 Hotel Horizons® Investment Performance forecast, this trend is expected to continue into 2025, and potentially a few years beyond that.
