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06. April 2012 
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MENA: Egypt shows signs of recovery
Hotels in Egypt have started a recovery but they remain a long way from their previous highs prior to the Arab Spring, according to the latest HotStats survey of full-service hotels in six MENA cities by TRI Hospitality Consulting.
Hotel performances in Cairo and Sharm El Sheikh have remained subdued since early 2011 when the popular uprising and related violence started. Full service hotels in Cairo reported occupancy of 41.2% and ADR of US$110.19 in February. TrevPAR for the month was US$91.13 and GOPPAR stood at US$36.1.
Occupancy levels in Sharm El Sheikh have remained relatively steady since December 2011 and stood at 52.0% in February. ARR for the month was reported at US$42.26 while GOPPAR levels remained low at US$11.0. Although the monthly performance indicators for February 2012 for both cities show substantial growth over the same period last year, such a comparison may be irrelevant as the hotel performance last year reflected the aftermath of a violent start of the Egyptian Revolution which saw widespread protests and related violence across the country.
Tourist arrivals in Egypt has declined by 32% to 10.2 million visitors and revenues dropped by 30% to US$9 billion in 2011 following the political uprising in the country. Although the street protests and violence have reduced, the risk of sporadic violence remains. Nevertheless, Egypt’s Ministry of Tourism has issued a positive outlook for 2012 and expects the country to receive 12-13 million visitors and revenues to improve to US$11 billion during the year.
“Hoteliers are reporting greater stability on the ground which might reflect an improvement in hotel performance in the coming months. A strong recovery in tourism arrivals is unlikely as long as the risk of violence remains”, commented Peter Goddard, managing director of TRI Hospitality Consulting in Dubai.
There were more encouraging results in Jeddah. Occupancy and Average Room Rates (ARR) at four and five star chain hotels in Jeddah increased 7.5 percentage points and 10.7% respectively, compared to the same period last year as the city saw a surge in tourist activity during the closing weeks of Jeddah Shopping Festival. Occupancy for the month touched 79.5% with ARR increasing to US$213.5. The city also hosted the second edition of Jeddah Travel and Tourism Exhibition (JTTX) in February which brought more than 200 exhibitors and over 10,000 visitors to the city during the three day event.
Hotels in Riyadh reported mixed results in February. While occupancy levels increased to 70.8%, ARR declined to US$267.36 albeit the changes in both metrics were marginal. Interestingly Total Revenue Per Available Room (TrevPAR) for the month saw a healthy growth during the month compared to last year, growing 8.7% to reach US$307.02. The growth in revenues and a 1.5 percentage point drop in Payroll helped the hotels improve the bottom line as Gross Operating Profit Per Available Room (GOPPAR) for the month increased 8.1% to US$180.99.
Hotel performances in Cairo and Sharm El Sheikh have remained subdued since early 2011 when the popular uprising and related violence started. Full service hotels in Cairo reported occupancy of 41.2% and ADR of US$110.19 in February. TrevPAR for the month was US$91.13 and GOPPAR stood at US$36.1.
Occupancy levels in Sharm El Sheikh have remained relatively steady since December 2011 and stood at 52.0% in February. ARR for the month was reported at US$42.26 while GOPPAR levels remained low at US$11.0. Although the monthly performance indicators for February 2012 for both cities show substantial growth over the same period last year, such a comparison may be irrelevant as the hotel performance last year reflected the aftermath of a violent start of the Egyptian Revolution which saw widespread protests and related violence across the country.
Tourist arrivals in Egypt has declined by 32% to 10.2 million visitors and revenues dropped by 30% to US$9 billion in 2011 following the political uprising in the country. Although the street protests and violence have reduced, the risk of sporadic violence remains. Nevertheless, Egypt’s Ministry of Tourism has issued a positive outlook for 2012 and expects the country to receive 12-13 million visitors and revenues to improve to US$11 billion during the year.
“Hoteliers are reporting greater stability on the ground which might reflect an improvement in hotel performance in the coming months. A strong recovery in tourism arrivals is unlikely as long as the risk of violence remains”, commented Peter Goddard, managing director of TRI Hospitality Consulting in Dubai.
There were more encouraging results in Jeddah. Occupancy and Average Room Rates (ARR) at four and five star chain hotels in Jeddah increased 7.5 percentage points and 10.7% respectively, compared to the same period last year as the city saw a surge in tourist activity during the closing weeks of Jeddah Shopping Festival. Occupancy for the month touched 79.5% with ARR increasing to US$213.5. The city also hosted the second edition of Jeddah Travel and Tourism Exhibition (JTTX) in February which brought more than 200 exhibitors and over 10,000 visitors to the city during the three day event.
Hotels in Riyadh reported mixed results in February. While occupancy levels increased to 70.8%, ARR declined to US$267.36 albeit the changes in both metrics were marginal. Interestingly Total Revenue Per Available Room (TrevPAR) for the month saw a healthy growth during the month compared to last year, growing 8.7% to reach US$307.02. The growth in revenues and a 1.5 percentage point drop in Payroll helped the hotels improve the bottom line as Gross Operating Profit Per Available Room (GOPPAR) for the month increased 8.1% to US$180.99.
