HotStats MENA Chain Hotels Market Review – April 2015
Amman and Dubai hotels witness profit decline
In April, a 10.8 percentage point reduction in occupancy levels to 62.3% had a direct impact on the performance of Amman hotels. The lower demand during the month saw both average room rate (ARR) and revenue per available room (RevPAR) fall by 4.3% and 18.5% respectively to US$154.94 and US$96.48. Hotels were able to offset the decline in room revenue with stronger food and beverage demand, which increased by 19.0% and 4.7%.
In Dubai, a 12.8% reduction in ARR to US$373.78 had a significant impact on profitability in April, falling by 19.5% compared to the same period last year. The combined effect of the falling Euro and stronger US Dollar is one of the key challenges facing the city, forcing hoteliers to reduce ARR in order to maintain occupancy levels at 84.9%. Food and beverage revenues were also impacted, falling by 19.8% and 26.7% respectively, resulting in a 15.7% decline in total revenue per available room (TRevPAR). Higher operating expenses compounded the lower overall revenues, forcing gross operating profit per available room (GOPPAR) down by 19.5% to US$273.13.
Profits rise in Cairo and Sharm El Sheikh on the back of renewed demand
Cairo hotels witnessed a 12.1 percentage point increase in occupancy levels to 53.5% in April, allowing hoteliers to yield a 9.9% rise in ARR to US$111.28 and driving an impressive 42.1% growth in RevPAR to US$59.52. Slightly softer food and beverage revenues had a marginal impact on TRevPAR performance, yet it still achieved a 33.8% growth over last year. The strong increase in total revenues had a direct flow through to the bottom-line with GOPPAR increasing by 29.1% to US$44.85.
A 7.4 percentage point increase in occupancy and a 19.8% growth in ARR also provided Sharm El Sheikh hotels with a significant boost to their bottom-line, with GOPPAR increasing by 27.1% to US$19.18. The return of international visitors and travel agent demand boosted occupancy to 69.9% in April and allowed hoteliers to yield an ARR and RevPAR of US$48.81 and US$34.09 respectively. The increased demand had a positive impact on food and beverage revenues which helped boost TRevPAR by 25.8% to US$59.68, the highest experienced in the past six months.
Manama hotels experienced mixed results
Hotels in Manama witnessed a marginal 1.9 percentage point increase in occupancy levels to 60.8%, however ARR fell by 2.8% to US$193.82. The growth in demand was sufficient enough to maintain RevPAR performance at US$117.87; however stronger food and beverage demand saw TRevPAR grow by 3.2% to US$193.13. In keeping with the mixed performance, the higher revenue margins were eroded by increased operating expenses resulting in GOPPAR remaining stable at US$80.77 compared to the same period last year.
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