Despite room occupancy levels at hotels in Abu Dhabi remaining above 80 per cent this month, the relentless decline in achieved average room rate is threatening both top and bottom line performance levels, according to the latest data from HotStats.

In addition to a 3.1 percentage point drop in room occupancy, achieved average room rate plummeted by 18.6 per cent this month, contributing to the 21.6 per cent year-on-year decline in RevPAR (Revenue per Available Room), to $101.08.

The decline in achieved average room rate In March continues the downward trajectory in this measure, which has been unrelenting, falling by 16.6 per cent over the past 36 months to $135.29 in the 12 months to March 2017 from $162.27 during the same period in 2013/14, with the drop accelerating in Q1 2017.

This is despite the country's economic minister forecasting economic growth of between 3.5 to 4.0 per cent in 2017 and the Abu Dhabi Tourism and Culture Authority expecting the growth in the number of visitors to the city to exceed last year's increase of eight per cent.

As a result of falling top line revenues, hotels in Abu Dhabi have struggled to maintain profitability, with profit per room falling by 27.0 per cent over the last 24 months to $54.42 in the 12 months to March 2017.

Despite recording a 1.0 per cent increase in total revenue this month, hotels in Amman suffered a 6.1 per cent decline in profit per room as costs continue to escalate.

Whilst hotels in the Jordanian capital successfully recorded a 3.0 per cent year-on-year increase in room occupancy, to 59.2 per cent, this was cancelled out by a 6.3 per cent decline in achieved average room rate, as a result Amman hotels recorded a 1.3 per cent year-on-year drop in RevPAR, to $86.60.

Despite the decline in Rooms Revenue, Amman hotels were buoyed by a 1.0 per cent increase in TrevPAR (Total Revenue per Available Room) to $142.09, fuelled by increases in non-rooms revenue, including Food and Beverage (+4.7 per cent) and Conference and Banqueting (+1.2 per cent) on a per available room basis.

However, costs are escalating, illustrated by the increase in both Payroll (+2.2 per cent) and Overheads (+6.5 per cent) this month and this situation is unlikely to improve in the short term as the government recently announced a tax increase on fuel prices as well as a number of commodities to combat its budget deficit.

As a result of increasing costs cancelling out the growth in total revenue, profit levels at hotels in Amman fell by 6.1 per cent year-on-year in March, to $47.83 per available room.

Profit Grows at Beirut Hotels as Demand Thrives in Q1 2017

Hotels in Beirut have a had a strong start to the year, recording a 21.0 per cent year-on-year increase in profit per room in Q1 2017, which has been on the back of a 7.2 per cent increase in RevPAR, as Lebanon welcomed a new government.

The top line growth at hotels in Beirut in March was primarily fuelled by the 10.1 per cent year-on-year increase in room occupancy, resulting in a 17.1 per cent increase in RevPAR, to $73.38.

Despite a 2.9 per cent increase in Overheads, hotels in Beirut successfully recorded a 49.5 per cent increase in profit per room for the month, which contributed to a 21.0 per cent increase in this measure for Q1 2017, marking a very strong start to the year.

At $24.73 in the 12 months to March 2017, the profit per room at Beirut hotels represents a peak in recent years and is equivalent to an increase of 4.5 times over the last 36 months, from just $4.45 during the same period in 2013/14.

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.

David Stephens
Operations Manager - HOTSTATS
HotStats Limited