Market Report Middle East

April 2014 Profits in Abu Dhabi Hotels Soared 25.8 Percent

MENA Chain Hotels Market Review - April 2014

HotStats Hotels in Abu Dhabi maintained robust performance throughout the month of April, as occupancy saw the highest growth amongst the five cities observed in the MENA region, according to the latest data from HotStats and commented by TRI Hospitality Consulting Middle East.

Abu Dhabi attracted a high number of international leisure and MICE visitors that drove occupancy rates of four and five star hotels to 84.6% in April. The strong demand allowed hoteliers to increase yields with the market witnessing a 9.0 percent surge in Average Room Rates (ARR) to US$163.32, resulting in Revenue per Available Room (RevPAR) rising by an astounding 18.2% to US$138.22. An increase in leisure and MICE demand in the city contributed to a substantial rise in conferencing, food and beverage revenues, as Total Revenue per Available Room (TRevPAR) grew by 14.3% to US$295.24. A slight reduction in payroll costs helped hotels register a 25.8% increase in Gross Operating Profits per Available Room (GOPPAR) to US$103.38.

“Abu Dhabi’s strong hotel performance in April was driven by a consistent rise in visitor numbers that boosted demand for rooms and F&B activity. The capital continued to attract international visitors, with particular growth witnessed from Chinese guests due to the Nu Skin Success Trip that delivered 6,000 guests and 12,500 room nights during the month. The incentive trip drove demand for top tourist attractions on Yas Island and benefitted Abu Dhabi’s hotels which witnessed a 25.8% uplift in profits” commented Peter Goddard, Managing Director of TRI Hospitality Consulting in Dubai.

Hotels in Jeddah see uplift in all performance indicators 

Hotels in Jeddah also reported growth across all major performance indicators as an increase in average rates and nonroom revenues boosted the bottom line yields. Occupancy for the month posted a growth of 2.5 percentage points to 81.4%, rising on the back of strong demand. Average room rates increased 9.3% closing the month at US$268.59 and boosting RevPAR by 12.7% to US$218.57. Increased revenues from food and beverage consumption, along with higher conferencing revenues led to a TRevPAR growth of 10.8%. Strong top-line revenues coupled with a 1.5 percentage point reduction in payroll costs boosted GOPPAR by 16.8% to US$174.13.

“April is traditionally a strong month for hotels in Jeddah, as it marks the start of high season that occurs during the summer months. The market witnessed particularly strong performance this year due to corporate demand arising from the delayed commencement of various infrastructure and rail projects. Additionally, the annual transition of the King’s court to Jeddah began six weeks earlier this year, during mid-April. Even though negotiated rates were contracted with members of the royal family and ministries, these guests illustrated a tendency to occupy prime rooms and suites. The demand for superior rooms had a positive impact on average rates which rose by 9.3% amongst four and five star hotels” commented Goddard.

Riyadh witnesses growth in TRevPAR from non-room revenues 

Riyadh maintained steady demand levels on the back of strong corporate activity during April. Hotels reported occupancy growth of 5.4 percentage points to 73.0%, although the market experienced a 4.9% decline in average rates to US$251.07, leaving RevPAR 2.7% higher compared to the same month last year. With food revenues comprising 34.3% of total revenues, the 5.0% growth witnessed in April drove a 14.3% increase in TRevPAR due to the strong contribution compared to other line items.

Table - MENA Chain Hotels Market Review - April 2014

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