Source: HotStats Limited

The recovery of the Abu Dhabi hotel market continues to gain momentum with four and five star hotels reporting positive gains in performance levels for the month of September compared to the same period last year. Average room rate (ARR) increased by 4.2% to US$128.96 while occupancy grew by 6.6 percentage points to 76.6%, resulting in revenue per available room (RevPAR) rising 14.0% to US$98.76. Total revenue per available room (TRevPAR) was impacted by decline in beverage revenues of 5.3%, however the strong room performance led to a 9.4% increase over the same period last year to US$219.13. The growth in RevPAR directly impacted gross operating profit per available room (GOPPAR) which increased by 42.4% to US$47.73.

"Abu Dhabi's hotel market is going from strength to strength with a strong performance in September boosting year-to-date figures. The continual increase in occupancy levels to 74.2% up to September has allowed hoteliers to drive higher average room rates for the first time higher than 2013 levels. We project this upwards trajectory to continue as the city braces itself for the high season with notable events such as the Formula 1 Abu Dhabi Grand Prix and the opening of the much anticipated Yas Mall in November." commented Peter Goddard, Managing Director of TRI Consulting.

Four and five star hotels in Sharm El Sheikh enjoyed a strong recovery in performance levels during September as RevPAR increased by a record 168.5% to US$39.15 compared to the same period last year, driven by a 43.5 percentage point growth in occupancy and an 18.2% increase in ARR to US$50.39. The improvement in top-line revenues resulted in the return of trading profits with GOPPAR increasing to US$25.11 from US$0.15 during the same period last year.

"Hotels in Sharm El Sheikh recorded one of their highest RevPAR levels in the past two years largely due to efforts undertaken by prominent travel associations and tour operators to entice visitors back to the Red Sea destination. The improvement in security and the social environment in Cairo has also helped to regain confidence in the tourism market throughout the country. Although, ARR remains soft compared to 2013, the increase in year-to-date overall occupancy levels will give hoteliers a boost in confidence that a return to business is on the horizon" commented Goddard.

Riyadh hotels record higher profits, however average room rates remain depressed

Despite an increase from the previous month, ARR remained soft in Riyadh during September compared to the same period last year. Average rates fell 5.7% to US$236.33, however an 11.4 percentage point increase in occupancy to 69.2% boosted RevPAR by 12.9% to US$163.45. Although TRevPAR increased by 7.3% to US$273.53, it was marginally depressed by dampening food and beverage and conferencing revenues. The stronger top-line performance driven from the strong demand resulted in GOPPAR increasing by 11.6% to US$134.27.

"A return to business for Riyadh hotels after the summer months was evident in September with double digit growth in occupancy to 69.2%. Although ARR continues to slowly decline on the back of increased competition through new supply, year-to-date figures show RevPAR performance continues to grow, up 7.6% on 2013 figures. Profit margin growth in the Saudi capital remains strong, however the volatility of food and beverage performance remains a concern" commented Peter Goddard.

Average room rates fall in Dubai, but profits continue to rise

Four and five star hotels in Dubai witnessed a mixed performance in September with occupancy levels growing 2.1 percentage points to 78.2%. However, ARR declined marginally during the month, falling 3.2% to US$231.36 and as a result RevPAR reduced by 0.5% to US$180.88. The contraction in room revenues did not materially impact the overall top-line performance as food and beverage revenues increased by 5.0%, boosting TRevPAR by 2.1% to US$353.86. A reduction in a number of operational expenses had a significant impact on profitability levels as GOPPAR increased by 8.3% to US$111.58.

"Dubai hotels showed a growth in occupancy levels in September as the market witnessed a return to business after the summer period. Although hotels recorded a 2.1 percentage point increase in occupancy, a rare decline in average rates directly impacted RevPAR levels for the month. Year-to-date figures indicate that hotels have managed to increase ARRs by 3.8% while occupancies have remained stable, which confirms the strength of the market particularly with the increase in hotel room supply witnessed during the year." commented Goddard.

A 38.6% growth in Jeddah hotel profits on the back of rising average room rates

Jeddah continues to lead as one of the high-growth hospitality markets in the region with robust gains in performance levels in September. The market witnessed a dramatic increase in top-line performance driven by a 21.4% increase in ARR to US$297.70, coupled with a 2.3 percentage point rise in occupancy to 85.9%. As a result, TRevPAR grew by 23.3% to US$390.45 aided by stronger food and beverage revenues which rose by 23.1% for the period. The strong revenues offset the fixed operating expenses resulting in a 38.6% increase in GOPPAR to US$202.52.

"The lack of new hotels entering the Jeddah hotel market and increased proliferation of demand across various segments has enabled hotels in the city to report the strongest growth in top line revenues in the region, which have been on the rise since the first quarter of this year. The surge in hotel demand for the period was driven by greater activity in the corporate and conferencing segments, which is expected to continue to grow on the back of the number of infrastructure and mixed-use projects under development in the city." commented Goddard.

About HotStats

HotStats provides monthly P&L benchmarking and market insight for the global hotel industry, collecting monthly detailed financial data from more than 8,500 hotels worldwide and over 100 different brands and independent hotels. HotStats provides more than 550 different KPIs covering all operating revenues, payroll, expenses, cost of sales and departmental and total hotel profitability.

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