MENA hotels: Cairo is booming, Jeddah and Riyadh struggle

MENA hotels: Cairo is booming, Jeddah and Riyadh struggle



  eTN Article:

A 130 percent year-on-year embrace profit per room at Cairo hotels in January continues the particular strong performance of hotels within the Egyptian capital in the last 24 months, based on the latest data.

Additional to the 32. 3% increase in 2015, hotels in Cairo recorded the 49. 4% increase in profit for each room in 2016, which was mainly due to a 36. 3% increase in RevPAR (Revenue per Available Room), fuelled by a 17. 2% increase in attained average room rate, to $62. 34.

Further towards the challenging periods of operation adopting the Arab Spring and security dangers in recent years, confidence in the city offers returned, and this month hotel lodging demand was boosted by the Silk capital hosting the 9th BGIICC Medical Conference.

Need from this event helped fuel the particular 8. 7 percentage point embrace occupancy (to 70. 5%), as well as a 96. 6% year-on-year increase in attained average room rate, which added to the 124. 4% year-on-year embrace RevPAR, to $70. 80.

The recovery in resort performance in Cairo in recent years is not any better illustrated than in the 252. 0% increase in GOPPAR (Gross Working Profit per Available Room) during the last 36 months to $37. 36 within the 12 months to January 2017, through $10. 61 during the same time period in 2013/14.

Areas Profitability Sliding Away in Jeddah

Rooms profit for each room at hotels in Jeddah continued its decline this 30 days, falling by 32. 0% year-on-year as the increase in Rooms Costs is constantly on the exceed the growth in Areas revenue at hotels in Saudi Arabia’ s second biggest town.

Whilst hotels within Jeddah were able to successfully record the 1 . 4% increase in achieved typical room rate in the 12 months in order to January 2017, this was cancelled out there by a 5. 0 percentage stage decline in room occupancy, to 71. 4%, as the oil crisis proceeds.

Furthermore, the $4. 05 increase in achieved average space rate in the last year has been completely wiped out by a $4. 25 embrace Rooms Cost of Sales, to $9. 96, as this cost is now similar to 4. 6% of Rooms Income. The 74. 4% increase in Areas Cost of Sales in the 12 months in order to January 2017 suggests, hotels within Jeddah have turned to Online Traveling Agents to help boost demand.

As a result of the movement within Rooms Revenue and related expenses, Rooms profit per room in hotels in Jeddah has lowered by 7. 2% in the last 12 months to $177. 86, which was despite savings in Rooms payroll (+8. 5%) and Rooms Expenses (+7. 4%).

Riyadh Challenges to Stop the Rot as Revenue Continues to Dive

More to the 24. 0% drop within profit per room in 2016, hotels in Riyadh suffered the 16. 2% year-on-year decline within profit in January suggesting there is certainly further woe to come in 2017.

The 13. 9% decline in RevPAR at resorts in Riyadh, was further amplified by falling revenues in other sections, including Food and Beverage (-15. 0%) and Conference and Banqueting (-20. 1%) on a per available room schedule and resulted in a 14. 3% drop in total revenue for the 30 days.

Whilst hotels within Riyadh are attempting to stop the decay by reducing their cost foundation, evidenced by the savings in Payroll (+10. 2%) and Overheads (+10. 5%), plummeting top line functionality is a continued cause for issue.

Since peaking in $149. 60 in the 12 months in order to May 2015, RevPAR at resorts in Riyadh has fallen simply by 12. 2% to $126. twelve in the 12 months to January 2017. This has subsequently led to a twenty-four. 4% drop in profit for each room during the same period since oil prices continue to stifle financial growth.

 

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