Hotels in Riyadh achieved the highest Average Room Rate (ARR) and Gross Operating Profit Per Available Room (GOPPAR) in the region for the month of December and full year 2011, according to the latest HotStats survey by TRI Hospitality Consulting.
Monthly performance indicators for Riyadh hotels show marginal changes in occupancy (+1.2 percentage point) and ARR (-3.0 per cent) in December 2011 compared to the same period in 2010. For 2011, hotels in Riyadh posted the highest ARR ($261.89), the lowest payroll levels (17.6 per cent) and the highest GOPPAR ($138.01) amongst the six cities surveyed by HotStats. Occupancy for the full year stood at 60.4 per cent which, despite being the lowest amongst the four GCC cities surveyed, managed to post a growth of 4.6 percentage points during the year.
Jeddah hotels reported a somewhat opposite growth trend to Riyadh during the month. Occupancy in Jeddah dropped 3.2 percentage points in December 2011 to 67.2 per cent while ARR increased to $ 203.65 (+5.8 per cent).
Egypt saw the largest decline in hotel performance amongst the six cities surveyed by in the region, both in terms of December monthly and 2011 full year figures, as the country remained under the grip of popular unrest and political uncertainty since January 2011. The capital city of Cairo reported occupancy of 36.3 per cent for the month, down by 37.1 percentage points from the previous year. However, ARR levels have held up despite the turmoil, dropping only by 4.4 per cent from the previous year to close the month at $117.47. Occupancy and ARR for the full year 2011 stood at 38.3 per cent and $121.02 respectively while TRevPar and GOPPAR for the period were down by 39.8 per cent and 56.1 per cent compared to the respective figures in 2010.
“In Egypt, the inception of the democratically elected parliament and the reassurance from the military regime regarding the transfer of power has apparently softened the street protests in Cairo. However, a strong recovery in hotel demand is likely to be difficult as long as the risk of sporadic violence such as the latest episode in Port Said exist,” said Peter Goddard, managing director, TRI Hospitality Consulting in Dubai.
In the UAE, hotels in Dubai reported the strongest growth in ARR during the month of December 2011 and finished the year on top of the other regional markets in terms occupancy, RevPar and TRevPar.
In terms of the full year performance, Dubai led the other markets in term of occupancy by a healthy margin, which also helped the city’s hotels clock the highest RevPAR ($168.07) and TRevPAR ($303.4) in the region. Full year occupancy in Dubai for 2011 was 81.8 per cent with an ARR of $205.5 (+7.6 per cent compared to 2010) and GOPPAR of $126.84 (+5.4 per cent).
Hotels in Abu Dhabi reported a 2.4 percentage point growth in occupancy during the month of December compared to the previous year, closing the month at 70.8 per cent. However, ARR for the month stood at $147.81 which was 23.5 per cent below December 2010. Consequently, the city-wide RevPAR for the month dropped 20.7 per cent while GOPPAR was lower by 24.9 per cent.
For 2011, Abu Dhabi hotels finished the year with the highest gain in terms of occupancy amongst the six markets covered in the HotStats survey and finished the year with 70.2 per cent occupancy compared to 62.4 per cent in 2010. However, on the other hand, the city also registered the highest decline in ARR during the year, sharing the spot with Sharm El Sheikh, posting a 19.3 per cent drop to finish the year at $158.39.
“2011 has brought mixed fortunes for the region in terms of hotel performance, with the Arab Spring being the biggest factor which influenced the markets. Hotels in the UAE have so far been the largest beneficiaries with Dubai in the lead whilst we see a trickle down effect on hotels in other parts of UAE as well. Abu Dhabi is the only exception which saw a deep correction in rates which was perhaps inevitable given that the historic high performances were skewed by an acute shortage of supply,” commented Goddard.
TRI Hospitality Consulting is a leading management consultancies in the fields of hotels, tourism, leisure and real estate and is the first hotel advisory team in the world. Their HotStats data offer an insight into the monthly hotels profit and loss benchmark service in the region.