Hotels in Dubai saw notable growth in demand and profits during the month of October 2012 while Abu Dhabi hotels saw further decline in performance, according to the latest HotStats survey by TRI Hospitality Consulting.
Average occupancy in Dubai’s four and five star hotels surveyed by HotStats hit 87.1 per cent for the month, up 5.7 percentage points from last year, as domestic and regional travellers flowed into the city to join the residents in Eid celebrations.
The Average Room Rate (ARR) for the month increased 7.5 per cent to $347.25 (Dh1,275.50) and Revenue per Available Room (RevPAR) went up 15 per cent to $302.31 (Dh1,110).
A 13.9 per cent growth in Total Revenue per Available Room (TRevPAR) to $508.72 (Dh1,868) and a drop on overheads resulted in a 20 per cent increase in Gross Operating Profit per Available Room (GOPPAR) to $258.58 (Dh950).
Conversely, the key hotel performance indicators in Abu Dhabi continued to show a decline as occupancy dropped 5.6 percentage point to 75.5 per cent and ARR fell 11.4 per cent to $145.06 (Dh533) against the same period last year, dragging RevPAR down by 17.5 per cent to
$109.47 (Dh402).
Although the capital saw an increase in leisure travellers during the month, hotels in the city continued to see rates drop across most market segments, leading to a 17 per cent fall in TRevPAR to $231.55 (Dh850.50) and dragging the GOPPAR down by 26.7 per cent to $94.08
(Dh345.55).
“Dubai hotels thrived as nearly half a million visitors flowed in to the city to celebrate Eid al Adha holidays. The administration’s efforts to attract a million visitors to the city over the 10-day period was supported by the re-launch of the ‘Eid in Dubai’ shopping festival which saw malls open 24 hours to serve shoppers. The festivities were complemented by a number of major conferences and exhibitions hosted in the city such as the Gitex, World Energy Forum and CityScape, all of which attract large international audience,” said Rashid Aboobacker, senior consultant at TRI Hospitality Consulting in Dubai.
“However, the performance of Abu Dhabi hotels were discouraging as despite healthy occupancy levels, average rates have continued to drop indicating a need for hotels to strategize beyond rate reduction to capture and retain business,” he said.
Hotels in Kuwait powered through the month of October with occupancy and ARR growing by 4 percentage points to 63.2 per cent and 6.9 per cent to $323.51, respectively, boosting RevPAR up by 14.1 per cent, as Kuwaiti families and visitors from neighbouring Saudi Arabia spent Eid
holidays in the city-state.
Interestingly, Kuwait hotels saw their food and beverage, and conference and banqueting revenues increase by more than a third, and leisure revenues multiplied during the month, pushing the TRevPAR for the month up by 26.8 per cent to $419.09 and GOPPAR up by 43.2 per
cent to $237.02.
Despite the sporadic protests in Cairo’s Tahrir Square during the month, hotels in Egypt’s capital maintained an upbeat performance in October 2012, according to the latest HotStats survey by TRI Hospitality Consulting. Occupancy rates in the Egyptian capital grew by 4.8 percentage points to 54.1 per cent and ARR grew 2.1 per cent to $119.29 during the month, causing a 12.2 per cent growth in RevPAR to $64.59. TRevPAR increased 11.2 per cent reaching $123.55 lifting GOPPAR up by 23.8 per cent to $64.81.
Sharm el Sheikh saw the biggest growth in performance this October as occupancy in four and five hotels surged 16.3 percentage points to 79.4 per cent, the highest in two years, while ARR increased 5.4 per cent to $59.29, the highest since January last year. TRevPAR was up 30.3 per cent at $81.58 compared to last year as both rooms and food and beverage revenues posted considerable growth on the back of a surge in regional and domestic visitors during the Eid holidays.
“A closer look at the data shows that the recovery in Cairo hotel performance was primarily helped by a growth in leisure segments, pointing to a recovery in confidence among tourists, which is what Egypt needs at this point as a tourism destination. The surge in hotel occupancy in Sharm El Sheikh is also considered to be pointing towards this growth in confidence as a large number of domestic and regional travellers returned to the resort city this season to spend their holidays”, said Aboobacker.
In the Kingdom of Saudi Arabia, the onset of this year’s Hajj season and the long holidays for Eid Al Adha marked the culmination of the tourist season in Jeddah in October. Hotels reported average occupancy of 78.4 per cent, which remained relatively unchanged from last year, while ARR increased 28.1 per cent to $251.47, boosting RevPAR to $197.23. In addition, the surveyed hotels saw revenues from meetings and events double during the month, driving TRevPAR up by 23.5 per cent to $302.92 and boosting the bottom line in terms of GOPPAR up by 40.2 per cent to $145.28.
On the contrary, hotels in Riyadh bore the burden of the drop in business demand during the two-week Eid al Adha holidays. Occupancy in four and five star hotels in Riyadh plummeted to 47.1 per cent, posting a fall of 21.7 percentage points compared to last year, and ARR dropped 7.9 per cent to $253.8, dragging RevPAR down by 36.9 per cent to $119.58. On the top line, TRevPAR dropped 30.8 per cent to $205.16 while at the bottom line GOPPAR fell 48.4 per cent to $91.07.
“Riyadh’s heavy reliance on corporate demand and the lack of leisure tourism results in strong demand seasonality which impacts hotel performance during summer months and Ramadan, as well as the holiday seasons when a large number of residents travel to other regional destinations. Although the demand levels are expected to bounce back in the short term as the city gets back to business as usual, the market-wide performance levels are likely to be impacted by the impending opening of a number of new upscale hotels in the coming months”, commented Aboobacker.
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