JEDDAH – Hotels in Jeddah reported growth across all major performance indicators as an increase in average rates and non-room revenues boosted the bottom line yields, according to the latest data from HotStats. Occupancy for the month posted a growth of 1.5 percentage points to 79.3 percent, rising for the fourth consecutive month. Average Room Rates increased 5.2 percent closing the month at $252.22 and boosting RevPAR by 7.2 percent to $199.98. Increased revenues from food and beverage consumption, along with higher conferencing revenues led to TRevPAR growth of 6.7 percent. Strong top-line revenues coupled with reduced operating and payroll costs boosted GOPPAR 7.7 percent to $145.76. “February is typically a strong month for hotels in Jeddah, as it marks the advent of peak season that continues in the following months. Jeddah is heavily driven by corporate activity which resumed following the December and January holidays that saw quieter hotel performance. The hosting of several events including the Saudi Travel and Tourism Exhibition and Saudi Arabia's International Machinery and Equipment Exhibition in the beginning of this year marked the return of corporate demand. Hotels reaped the benefits of increased corporate demand with higher food and beverage consumption, coupled with conferencing and banqueting revenues growing 5 percent from the previous year,” said Peter Goddard, Managing Director of TRI Hospitality Consulting in Dubai. Hotels in Dubai maintained robust performance throughout the month of February, as all key indicators reached the highest levels among the five cities surveyed in the MENA region, according to the latest data from HotStats. Dubai hosted a plethora of events and attracted a high number of international visitors that propelled occupancy rates of four and five star hotels to 87. percent. The strong demand allowed hoteliers to increase yields with the market witnessing an 8.7 percent surge in Average Room Rates (ARR) to $366.99, resulting in Revenue per Available Room (RevPAR) rising 7.3 percent to $321.59. An increase in leisure demand in the city contributed a 4.0 percent and 3.8 percent rise in food and beverage revenues respectively, as Total Revenue per Available Room (TRevPAR) grew 5.8 percent to $554.93. A slight reduction in payroll costs helped hotels register an 8.6 percent increase in Gross Operating Profits per Available Room (GOPPAR) to an impressive $282.09. “Dubai's stellar hotel performance continued in February as strong occupancy and increasing average rates resulted in Gross Operating Profits exceeding 50 percent of total revenue. Strong economic activity within the city coupled with a consistent rise in visitor numbers has driven demand for Dubai's hotels, especially food and beverage demand with revenues increasing over 4.0 percent from the same period in 2013. The uplift in overall revenues directly impacted bottom line performance which reached $282.09 per available room” commented Peter Goddard, Managing Director at TRI Hospitality Consulting in Dubai. Abu Dhabi hotels experienced a 20 percent drop in bottom line performance. Abu Dhabi hotels struggled to remain afloat in February as average rates fell throughout the month. Although occupancy levels in the capital increased 3.3 percentage points reaching 80.2 percent, ARR plummeted 18.1 percent to $162.46, reducing RevPAR by 14.6 percent to $130.36. A significant decrease in food and beverage revenues coupled with a decline in conference and banqueting revenues saw TRevPAR drop 8.5 percent to $273.68. A 2.5 percentage point rise in payroll costs caused a further profitability decline of 20.5 percent to $90.83. “Although hotels in Abu Dhabi continued to report strong occupancies, the market experienced an 18.1 percent decline in average rates compared to the same month last year. This was largely due to the exceptional performance witnessed during February 2013 when Abu Dhabi hosted IDEX, a biennial mega-event which allowed hotels to command significantly higher average rates. This year, the lower average rates significantly impacted room revenues that were further suppressed by increased rooms expenses and payroll costs. Limited improvements in cost controls witnessed through higher overhead costs and operating expenses caused profitability levels to plummet by over 20 percent,” said Goddard. The low performance registered by Kuwait hotels in February was attributed to outbound travel during the national holiday which caused occupancy to slump 10.2 percentage points to 48.4 percent. A 1.2 percent rise in ARR to $280.66 was insufficient to negate the fall in occupancy which drove RevPAR down 16.4 percent to $135.91. Low corporate demand resulted in a 10.9 percent fall in conferencing and banqueting revenues which suppressed TRevPAR, causing it to decline 16.6 percent. A 2.7 percentage point rise in payroll costs coupled with a surge in operating expenses weighed heavily on the bottom line as GOPPAR plummeted 26.7 percent to $116.03. “Hotels in Kuwait were heavily impacted by the extended national and school holidays that resulted in reduced corporate demand and an outflow of residents. The 10-day ministry holiday prompted residents to travel to other regional destinations such as Jeddah and Dubai, with Kuwait witnessing limited internal activities. With the government and corporate segment comprising the majority of demand, the decline in activities resulted in lower dining and conferencing revenues, causing departmental profits to drop 20.7 percent. Additionally, higher payroll costs across all major operating departments drove bottom line profits to fall 26.7 percent, as Kuwait witnessed a substantial decline in GOPPAR across all regional markets surveyed by HotStats” commented Peter Goddard, Managing Director of TRI Hospitality Consulting in Dubai. – SG