JEDDAH – Hotel industry in Saudi Arabia showed normalization of demand distribution in the month of September particularly in key cities of Riyadh and Jeddah, the latest HotStats MENA Chain Hotels Market Review revealed Monday. In the MENA region, surveyed markets showed signs of relief as summer months subside allowing for the flourishing of hotel activity in the region, the latest HotStats survey by TRI Hospitality Consulting noted. In the Kingdom, Riyadh-based hotels showed a strong come back as indicators bounced back from the slump seen during the summer months. When compared to the same period last year, occupancy rates in Riyadh show an increase of 4.1 percentage points reaching 60.5 percent while average room rates (ARR) increased 1.6 percent to $250.60, among the highest in the region. Food and beverage revenues increased significantly suggesting an increase in events previously paused in accordance with the holy month of Ramadan. This upsurge in festivities accounted for a 10.5 percent rise in total revenue per available room (TRevPAR) as well as a 10.1 percent increase in profits to $131.4, the survey said. Similarly, hotel performance in Jeddah showed no signs of slowing as occupancies rose 6.2 percentage points to 81.5 percent in addition to a 3.9 percent increase in ARR to $222.29. A rise in corporate demand owing to the return of business activity justified the 12.6 percent increase in RevPAR to $181.24 which, coupled with an increase in food and beverage revenues, drove a growth in TRevPAR of 10.1 percent to $278.90 leading to an 11.8 percent increase in GOPPAR to $123.03. “The steep increase in Riyadh's performance is symptomatic of post-summer lulls, as businesses get back on track and corporate demand is spurred. Festivities and events halted during the holy month resumed, accounting for a large increase in food and beverage revenues which drove an increase in the bottom line,” said Peter Goddard, managing director of TRI Hospitality Consulting in Dubai. Elsewhere, hotels in Dubai showed strong profitability throughout the month of September this year, although the market witnessed a 2.8 percentage point decrease in occupancy. ARR in the city increased by 3.9 percent to $218.30, while TRevPAR grew 2.7 percent to $311.59. The city hosted an array of events throughout the month of September allowing hoteliers to yield higher rates, thereby boosting gross operating profit per average room (GOPPAR) 11.3 percent to $93.66. Abu Dhabi's hotel market appeared stagnated as performance indicators declined significantly in comparison with September of last year with ARR decreasing 10.6 percent to $124.28, and occupancies dropping 0.2 percentage points to 65.5 percent. RevPAR decreased 10.9 percent to $81.37, and TRevPAR dropped 7.7 percent to $188.93. The continued pressure on average rates coupled with a proliferation of competition depleted GOPPAR by 18.2 percent to $56.78, the lowest registered profit in the GCC for the month. “Dubai plays host to a miscellany of events throughout the month of September, namely INDEX and Gitex exhibitions which helped maintain healthy demand levels after Eid al Fitr. As the leisure segment continues to represent the largest demand in the city, the forecasted influx of leisure travellers over the next few months is likely to boost key performance indicators until the end of the year. On the other hand, hotels in Abu Dhabi continue to register weak performance mostly due to the city's heavy reliance on corporate demand which remained subdued throughout September,” Goddard said. Egypt hotel markets meanwhile mend themselves as Kuwait forges ahead with remarkable success, the study said. Hotel performance in Egypt continues to show on-going signs of recovery. Occupancy rates in Cairo grew to 55.4 percent, while RevPAR and TRevPAR stood at $63.63 and $125.96 respectively. Demand in Cairo has long been divided proportionately between corporate travellers and leisure seekers, both of whom have restored their confidence in the destination allowing for GOPPAR to grow 19.2 percent to $63.79. Sharm El Sheikh also boasted increases in performance indicators as occupancy grew 5.3 percentage points to 74.5 percent and RevPAR increased 5.1 percent to $32.10. Profits in the popular destination remained subdued at $20.61, mostly due to reduced rates granted to travel agents and inbound tour groups. “Our HotStats data for September shows a steadily recovering Egyptian market with hotels in Cairo registering their highest profits in a year. Sharm El Sheikh is well on its way to recovery, in spite of travel agent fees that continue to diminish profit margins. With the city's high season approaching we anticipate continued growth for the remainder of 2012 and early 2013,” Goddard further said. – SG
