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31. Juli 2012 
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MENA Chain Hotels Market: Jeddah posts revenue and profit growth
Hotels in Jeddah hit their highest profitability for three years during June thanks to strong summer demand. The properties enjoyed a 15.0% growth in RevPAR driving a 13.8% growth in profits during the month, according to the latest HotStats survey of full service hotels in six MENA cities by TRI Hospitality Consulting.
Average occupancy at four and five star chain hotels in the city reached 85.4%, up by 5.8 percentage points, with Average Room Rates (ARR) increasing 7.2% to US$226.63 during the month, compared to the same period last year. Revenue Per Available Room (RevPAR) for the month surged 15.0% to US$193.62 leading to strong growth in profits in terms of Gross Operating Profit Per Available Room (GOPPAR) by 13.8% to $147.95.
“Jeddah achieved the highest occupancy and profitability in the region in June as hotels capitalise on the strong summer demand. Jeddah is a summer holiday destination for domestic travellers as well as the summer seat of the Saudi government.
“The GOPPAR level of US$147.95 achieved by hotels in June is the highest in the city in the past three years. Jeddah is well positioned to perform well throughout the remainder of the year and into early 2013 as the domestic demand is continued to be strong until the Levant is safe to travel. In addition, Jeddah hotels will also benefit from the limited future supply anticipated to enter the market in the short term,” commented Peter Goddard, managing director of TRI Hospitality Consulting in Dubai.
Riyadh hotel occupancy levels remained stable in June, contracting marginally by 0.1 percentage points compared to this time last year. However, the ARR dropped 9.6%, causing a 9.8% fall in RevPAR. This reduction in top line revenues coupled with an increase in payroll by 2.2% resulted in GOPPAR falling 10.3% to US$129.80.
“The lower performance levels of Riyadh hotels in June reflect the annual performance cycle in which performance levels and profitability reduces in the summer months. 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. This is evident with the lower ARR’s achieved in June and we expect this to continue into July and August due the Holy Month of Ramadan when business activity slows further” said Goddard.
In Egypt, Revenue per Available Room (RevPAR) in Sharm El Sheikh increased 33.9% to US$24.43 in June driven by an 11.7% growth in Average Room Rate (ARR) to US$43.15 and an increase of 9.4 percentage point in occupancy to 56.6% compared to the same month last year. In terms of profits, GOPPAR for the month saw an impressive growth of 91.1% to US$11.96.
Cairo hotels recorded a 2.3 percentage point increase in occupancy to 43.0% in June however ARR fell by 8.7 percent to $108.58. The increase in occupancy was not enough to absorb the decrease in rates with RevPAR falling 3.5% to $46.64. As a direct result profitability fell 17.3% to a GOPPAR of $38.34.
Average occupancy at four and five star chain hotels in the city reached 85.4%, up by 5.8 percentage points, with Average Room Rates (ARR) increasing 7.2% to US$226.63 during the month, compared to the same period last year. Revenue Per Available Room (RevPAR) for the month surged 15.0% to US$193.62 leading to strong growth in profits in terms of Gross Operating Profit Per Available Room (GOPPAR) by 13.8% to $147.95.
“Jeddah achieved the highest occupancy and profitability in the region in June as hotels capitalise on the strong summer demand. Jeddah is a summer holiday destination for domestic travellers as well as the summer seat of the Saudi government.
“The GOPPAR level of US$147.95 achieved by hotels in June is the highest in the city in the past three years. Jeddah is well positioned to perform well throughout the remainder of the year and into early 2013 as the domestic demand is continued to be strong until the Levant is safe to travel. In addition, Jeddah hotels will also benefit from the limited future supply anticipated to enter the market in the short term,” commented Peter Goddard, managing director of TRI Hospitality Consulting in Dubai.
Riyadh hotel occupancy levels remained stable in June, contracting marginally by 0.1 percentage points compared to this time last year. However, the ARR dropped 9.6%, causing a 9.8% fall in RevPAR. This reduction in top line revenues coupled with an increase in payroll by 2.2% resulted in GOPPAR falling 10.3% to US$129.80.
“The lower performance levels of Riyadh hotels in June reflect the annual performance cycle in which performance levels and profitability reduces in the summer months. 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. This is evident with the lower ARR’s achieved in June and we expect this to continue into July and August due the Holy Month of Ramadan when business activity slows further” said Goddard.
In Egypt, Revenue per Available Room (RevPAR) in Sharm El Sheikh increased 33.9% to US$24.43 in June driven by an 11.7% growth in Average Room Rate (ARR) to US$43.15 and an increase of 9.4 percentage point in occupancy to 56.6% compared to the same month last year. In terms of profits, GOPPAR for the month saw an impressive growth of 91.1% to US$11.96.
Cairo hotels recorded a 2.3 percentage point increase in occupancy to 43.0% in June however ARR fell by 8.7 percent to $108.58. The increase in occupancy was not enough to absorb the decrease in rates with RevPAR falling 3.5% to $46.64. As a direct result profitability fell 17.3% to a GOPPAR of $38.34.
