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Jeddah, Riyadh hotel occupancy declines
Published in The Saudi Gazette on 07 - 03 - 2013

JEDDAH – Hotel occupancy in Saudi Arabia declined in January 2013 on account of two-week holidays, the latest HotStats MENA Chain Hotels Market Review of full service four and five-star hotels by TRI Hospitality Consulting revealed.
In Jeddah, hotels saw occupancy drop 3.7 percentage points to 72.7 percent in January despite the annual Hayya Jeddah Shopping Festival. Nevertheless, other performance indicators remained elevated throughout the month with Average Room Rates (ARR) increasing 9.0 percent to $236.69, maintaining positive growth in Revenue per Available Room (RevPAR) which grew 5 percent to $172.16. An increase in food and beverage revenues driven by an increase in leisure travelers and conference and meeting demand resulted in a 4.3 percent growth in Total Revenue per Available Room (TRevPAR) to $265.31, rising overall Gross Operating Profit per Available Room (GOPPAR) 3.1 percent to $118.93.
Hotels in Riyadh saw occupancy drop marginally by 1.3 percentage points to 60.3 percent. ARR and RevPAR saw declines of 0.6 percent and 1.6 percent to $251.24 and $151.52 respectively although food and beverage revenues posted double digit growth during the month, resulting in a marginal 0.5 percent growth in TRevPAR to $243.96.
Nevertheless, a 3.3 percentage point decrease in Payroll couldn't mask bottom line profits declines, with GOPPAR down 6.2 percent to $130.0.
“A week-long holiday in Saudi Arabia is considered to have negatively affected Riyadh's corporate hotels as business segments remains the staple source of demand for most hotels in the city.
Hotel performance in Jeddah, on the other hand, also seems to have suffered, partly due to the Dubai Shopping Festival which drew tens of thousands of Saudi nationals away from local destinations. Although the Hayya Jeddah was expected to attract approximately 1.4 million visitors this year, we believe the event was overshadowed by the DSF where Saudis nationals represent the second largest visitor group,” said Peter Goddard, Managing Director at TRI Hospitality Consulting.
Meanwhile, hotels in Dubai continued to surpass previous year performances as regional and international tourists flock to the city for the 18th Dubai Shopping Festival, boosting key performance indicators across the market, HotStats survey said.
Although exact number of visitors is not available yet, some 4.7 million visitors were expected to arrive in the city during this year's event.
Hotel occupancies across the city surged as a result to 89.6 percent, up 4.2 percentage points from last year, while Average Room Rates (ARR) grew 5.0 percent to $359.39. The resulting 10.2 percent growth in Revenue per Available Room (RevPAR) to $321.85, along with a 6.5 percent increase in food and beverage revenues, boosted Total Revenue per Available Room (TRevPAR) to $522.92, the highest of the markets surveyed. On the bottom line, this resulted in a 14.5 percent growth in Gross Operating Profits per Available Room (GOPPAR) rising to $279.30. – SG


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