Hotels in Jeddah saw a 30% surge in profits during March, according to the latest survey of full-service hotels in six MENA cities by TRI Hospitality Consulting.
March was a busy month in Jeddah as the city hosted a number of major events that helped occupancy at 4- and 5-star hotels in the city jump 7.2 percentage points and ADR 12%. Monthly occupancy stood at 81.1% at an ARR of US$220.50. RevPAR for the month surged 22.9% to US$178.90, which led to profits in terms of GOPPAR increasing by 29.6% during the month compared to last year.
“Performance of hotels in Jeddah has shown significant improvement in the last few months on the back of solid growth in tourism activities, both business and leisure. The first quarter results from HotStats show a 26.7% growth RevPAR, but what is more interesting is that profits. GOPPAR have grown by 41.8% during this period compared to Q1 2011,” commented Peter Goddard, managing director of TRI Hospitality Consulting in Dubai.
The performance trend in Riyadh, Saudi Arabia, largely remained stable from last month with hotels showing mixed results in March. Occupancy levels increased 1.5 percentage points during the month to 68.9% and ADR declined 3.4% to US$262.4. Other key performance indicators such as TRevPAR and GOPPAR saw only marginal change during the month and stood at US$287.24 and US$166.52 respectively.
In Egypt, hotels in Cairo continued to show signs of recovery. March occupancy levels for full-service hotels touched 47.9%, growing by 23.4 percentage points from the same period last year, although ADR dropped 9.6% to US$109.81. Nevertheless, the 76.5% growth in RevPAR and 12.6% drop in payroll costs have caused GOPPAR to grow by 164.7% to US$51.57 compared to US$19.48 during the same period previous year.
“We are noticing some encouraging signs of recovery in the tourism and hotel performance in Egypt. According to the latest figures published by the Ministry of Tourism, tourist arrivals have increased 32% in Q1 2012, led by arrivals from Arab countries, which increased by 62.9%. However, on the flipside, it will be interesting to note the impact of recovery in the Arab Spring markets on the other markets, which have benefited from the Arab Spring, but this is not likely to happen in the short term,” said Goddard.
Hotels in Dubai, United Arab Emirates, reported growth in revenues and profits while Abu Dhabi saw rates and profits decline in March 2012. RevPAR in Dubai increased 9.3% to US$298.29 in March driven by a 6.8% growth in ADR to US$341.77 and a relatively marginal increase of 2.0 percentage point in occupancy. In terms of profits, GOPPAR for the month saw a growth of 12.6% to US$271.5, significantly higher than the other GCC city surveyed. Once again, hotels in Dubai have benefited from a series of tourism events held in the city through out the month.
Performance levels for hotels in Abu Dhabi, United Arab Emirates, remained subdued in March compared to the same period last year. Although occupancy remained stable at 74.8%, ADR for the month declined 12.2% causing a similar decline in RevPAR. The 10.1% drop in TRevPAR, combined with a 3.7% increase in payroll has resulted in a sharp drop in profits during the month, which saw GOPPAR drop 18.7% to reach US$101.64.
In terms of the performance trends for first quarter of the year, the Abu Dhabi citywide ADR stood 19.2% below last year at US$162.36, while GOPPAR was 20.8% below the same period last, averaging at US$108.17 for the first three months of the year.
“In Abu Dhabi, the sharp drop in profitability of 4-star and 5-star hotels is driven by a combination of factors and not just limited to the impact of the drop in rates,” said Goddard. “While this has certainly had a negative impact on the citywide RevPAR, our survey indicates that a more substantial drop in non-rooms revenues such as conference and banqueting revenues and food and beverage revenues, as well as a notable increase in certain costs such as payroll costs and utilities have caused additional damage to the bottom line.”