Dubai leads MENA performance in November

Dubai hotels reported strong growth in ARR in November 2011, resulting in a knock-on effect on the RevPAR and GOPPAR levels, according to the latest HotStats survey of full-service hotels in six regional cities by TRI Hospitality Consulting.  

Occupancy levels in Dubai remained strong during the month at 88.8% while ARR surged to US$265.48, up by 19% over the same period last year, giving a boost to the GOPPAR, which increased by 11.7% to US$201.81 for the month. Consequently, year-to-date occupancy stood at 81.5% and TRevPAR was US$296.84.

The spike in ARR was primarily driven by a convergence of strong leisure, MICE and corporate demand during the month. Hotels in the city benefited from the upswing in leisure demand during the Eid Al Adha holidays, which attract a significant number of GCC families travelling to Dubai for shopping and entertainment.

“While everyone agree that hotels in UAE have benefited from the Arab Spring, industry reports also show that there has been a general improvement in corporate activity in the recent months, which we believe has contributed to the overall performance,” commented Peter Goddard, managing director, TRI Hospitality Consulting.

In the UAE capital Abu Dhabi, the third edition of the Yas Marina F1 Grand Prix helped occupancy for the month reach the peak at 84.3%, closing 7.6 percentage points above the same period in 2010. However, with the exception of occupancy, both monthly and year-to-date performances of Abu Dhabi hotels have remained substantially below the previous year’s performance across all metrics, with a notable drop in the ARR. Hotels in Abu Dhabi reported a RevPAR of US$179.01 and GOPPAR of US$170.16 for the month.

Jeddah and Riyadh posted occupancy, RevPAR and GOPPAR growth, while Cairo and Sharm El Sheikh continued to struggle during the month. Jeddah saw hotel occupancy and average rate achieve peak levels in November due to the surge in demand from Hajj pilgrims. Hotels in Jeddah reported occupancy of 79.1% and ARR of US$220.51 for the month, up by 1.1 percentage points and 8.3% respectively over November 2010. However, the significant boost in food and beverage revenues during the pilgrimage season have resulted in a 12.6% increase in TrevPAR, while GOPPAR levels climbed by 18.4% during the month to US$137.71 compared to US$116.35 last year.

Riyadh saw a relatively quite month with hotels reporting occupancy of 52.2% and ARR of US$258.77. Although the city-wide ARR dropped by 2.6% during the month, which saw the city lose its rate leadership to Dubai, the positive movement in occupancy and TrevPAR resulted in a 4.7% growth in profits during the month when compared to the previous year.

Hotels in Cairo reported occupancy of 40.8% which was 41.3 percentage points below the same period last year, and ARR of US$120.80, which was 1.3% better than the previous year. RevPAR and GOPPAR saw a decline of 49.7% and 58.4% respectively during the same period.

Sharm El Sheikh, on the other hand, continued to see recovery in occupancy and rates to 72.2% and US$55.52, although these figures are still trailing last year by 21.3 percentage points and 22% respectively. Profits levels stood at US$31.61, 51.9% below the same period last year.