A view of the courtyard of Marriot Hotel in Kuwait City. Very low occupancies were recorded in a range of markets across the region, including Abu Dhabi (51.0 per cent), Doha (42.1 per cent) and Kuwait (35.5 per cent). Thus hoteliers struggled to drive room rates. |
Dubai: Mixed Profit Performance for Middle East & North Africa Hotels during Ramadan
The Middle East & North Africa (Mena) hotel sector experienced a major disparity in performance over the Ramadan period, according to the latest worldwide poll of full-service hotels from HotStats.
Overall, the Mena region saw an increase of 2.9 per cent in gross operating profit per available room (GOPPAR), a key indicator of hotel performance, in June.
Despite June of this year performing ahead of the same month last year, with increases in key metrics, the observing of Ramadan for almost the entire month of June meant that the period did not compare favourably with the previous 12 months.
This is best exemplified in room occupancy numbers, which plummeted to 47.9 per cent in June, which is well below the rolling average of 63.6 per cent recorded in the 12 months to June 2017. Very low occupancies were recorded in a range of markets across the region, including Abu Dhabi (51.0 per cent), Doha (42.1 per cent) and Kuwait (35.5 per cent).
As a result of the reduced volume, hoteliers struggled to drive room rates, and regional TrevPAR, or total revenue per available room, calculated by dividing the total net revenues of a property by the total available rooms, fell to just $163.60 (Dh600.41), against a rolling 12-month average of $205.88.
Commercial demand levels
Profit per room throughout the month of Ramadan was another metric to take a hit, at 44.7 per cent below the average for the 12-months to June 2017, at $80.68.
Pablo Alonso, CEO of HotStats, said in a statement: “The 30 days of Ramadan ran from late May to late June this year and severely impacted trading in some major markets this month. In addition to impacting commercial demand levels, Ramadan also hit leisure demand, as inbound visitors are reluctant to travel to destinations observing Ramadan as there is doubt about what will actually be open.”
For hotels in Abu Dhabi, the average revenue per available room (RevPAR) plummeted to a monthly five-year low of just $49.96 in June, 48.7 per cent below the average for the 12-months to June 2017, at $97.35.
Despite hotels in the UAE capital converting an 8.1 per cent decline in TrevPAR into a 16.6 per cent increase in GOPPAR, as shrewd hoteliers slashed costs, a loss of -$5.09 was recorded at Abu Dhabi hotels during Ramadan.
