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July 30, 2012

Jeddah hotels’ ReVPAR in June 2012 rises by 15%: TRI Hospitality

Jeddah hotels experienced a 15% rise in revenue per available room (RevPAR), which resulted in a profit growth of 13.8% in June 2012, according to a survey.

By Srivani Venna

Jeddah hotels experienced a 15% rise in revenue per available room (RevPAR), which resulted in a profit growth of 13.8% in June 2012, according to a survey.

The survey, conducted by TRI Hospitality Consulting on full service hotels in six Middle East and North Africa (MENA) cities, revealed that average occupancy at four and five star chain hotels in the city reached 85.4%, up by 5.8%, with average room rates (ARR) increasing by 7.2%.

"The survey revealed that average occupancy at four and five star chain hotels in the city reached 85.4%."

Riyadh hotel occupancy levels in the month contracted marginally by 0.1% points compared to 2011 and saw an ARR decline of 9.6%, causing a fall of 9.8% in RevPAR.

The fall in top line revenues along with an increase in payroll by 2.2% resulted in gross operating profit per available room (GOPPAR) declining by 10.3%.

Peter Goddard, managing director of TRI Hospitality Consulting in Dubai, said Riyadh hotels’ lower performance levels in June reveal how performance levels and profitability reduce in the summer months.

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"The corporate and government segments which are the backbone of demand in the capital drop significantly, resulting in hotels applying discounts on rates to attract business," Goddard said.

In Egypt, RevPAR in Sharm El Sheikh rose by 33.9% due to 11.7% growth in ARR and an increase of 9.4% point in occupancy to 56.6%, compared to the same month in 2011.

Hotels in Cairo recorded a 2.3% point increase in occupancy to 43%, where ARR declined by 8.7% and RevPAR fell by 3.5%, while Abu Dhabi saw a decline in ARR by 8.5%, which resulted in a reduction in GOPPAR by 12.6%.

Hotels in Dubai saw ARR in increasing by 9.2%, RevPAR rising by 10.3% and occupancy levels remaining stable with a 0.7% point increase over the same period of 2011, TRI concluded.

Dubai performance levels are anticipated to remain strong until the early part of 2013, when the market is expected to see a considerable addition to supply.

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