JEDDAH – Hotels in Dubai concluded 2012 with the highest profits in the region for the third consecutive year, the latest HotStats survey of full service hotels in seven MENA cities by TRI Hospitality Consulting showed Wednesday. Monthly performance indicators for Dubai hotels shows gross operating profits per available room (GOPPAR) rose 13.8 percent to $240.46, the highest profits registered in the surveyed region. Bottom line performance levels were boosted by a 5.2 percent growth in total revenue per available room (TRevPAR) and a 4.9 percent reduction in operating expenses. Occupancy levels remained stable albeit a 0.8 percentage point increase to 84.6 percent, with average room rates (ARR) rising 3.6 percent to $322.93. The festive season spurred a growth in food and beverage and leisure revenues which assisted in driving the increase in TRevPAR to $497.19. Abu Dhabi hotels continued in their struggle to lift key performance indicators which remained under pressure during the month of December despite a 6.7 percentage point increase in occupancy to 76.0 percent, attributed to an influx of corporate and leisure demand. Ongoing rate reductions which are a by-product of the high competition in the capital, fuelled a 14.7 percent reduction in ARR to $130.61. Although occupancy levels increased, the decline in ARR resulted in RevPAR falling by 6.5 percent to $99.31 which impacted the bottom line by reducing GOPPAR 9.7 percent to $90.53. “December figures for Dubai reflect the continued trend in 2012 as Dubai's uninterrupted string of events, conferences, and festivals maintained a steady stream of demand allowing for GOPPAR levels to increase 13.8 percent to $186.45. However, hotels in Abu Dhabi have failed to capitalize on record guest arrivals as hotels continue to struggle with falling rates which have slashed bottom line performance by 18.1 percent in comparison with 2011 figures,” said Peter Goddard, Managing Director at TRI Hospitality Consulting. Hotels in Jeddah outperformed the previous year's performance figures for the month of December as demand surged in the city. Hoteliers capitalized on an increased occupancy of 68.1 percent with a 12.3 percent increase in ARR to $229.07, the effects of which trickled down to GOPPAR increasing 16.6 percent to $108.11. On the other hand, Riyadh's hotel market performance wilted during the month of December, as occupancy shrunk 2.3 percentage points to 56.2 percent, as new market entrants imposed a redistribution of demand. ARR dropped 1.2 percent to $260.73, reducing RevPAR 5.1 percent to $146.42. The dispersion of corporate demand was reflected in a sharp decrease in meeting room revenues, reducing TRevPAR 4.2 percent to $253.88 and dropping GOPPAR 11.1 percent to $131.78. “New hotel openings in Riyadh are showing their impact on the market's overall performance as new entrants compete with existing properties forcing a reduction in performance indicators. This is likely to continue into to the New Year as a number of new properties including the Fairmont, Nobu Hospitality and Rosewood are all expected to open in 2013. Contrarily, Jeddah's performance, driven by strong corporate and leisure demand, remained strong throughout the year, with bottom line profits increasing 24.2 percent to $133.64 compared with 2011,” he noted. Egyptian hotels show continued signs of recovery with profit margins increasing over 25 percent in December, the latest HotStats survey said. Cairo hotels reported an 8.6 percent increase in REVPAR to $46.36, boosted by a 4.2 percentage point growth in occupancy. Although ARR fell 2.7 percent, the growth in occupancy and food and beverage revenues saw TRevPAR increase 5.5 percent to $95.38. This resulted in Cairo hotels witnessing a 25.6 percent rise in GOPPAR to $41.14. Hotels in Sharm El Sheikh followed a similar trend to Cairo with occupancy rising 8.3 percentage points to 60.2 percent, however ARR remained under pressure falling 4.5 percent to $51.50, due to lower rates in third party agreements which drives demand in the coastal city. – SG
