The growth in profit was driven by a 2.2 percent increase in TrevPAR as hotels delivered record revenue increases across all departments.
The 2018 over 2017 Q1 TrevPAR growth contributed to the CAGR increase of 5.0 percent per annum over the last four years, to $259.68 in Q1 2018, an uplift of almost $20 from Q1 2015.
However, amongst the positive growth story, hotels in the U.S. find themselves wrestling with rising costs.
The key cost increase has been labor, which has grown to 35.8 percent of total revenue in Q1 2018 from 33.4 percent in Q1 2015.
Even though GOPPAR reflects a CAGR of 2.9 percent per annum over the last four years, the froth may be coming off profit conversion. GOP as a proportion of total revenue fell to 37.2 percent in Q1 2018, from 37.3 percent in Q1 2017. Moreover, flow through in the last two years has fallen from 51 percent in Q1 2017 to 31 percent in Q1 2018.