Abu Dhabi: Hotels in Egypt’s Sharm Al Shaikh continued to struggle in October 2016 as the city suffered major declines in top line performance as a result of a massive drop in occupancy rates.
According to the latest report by HotStats, occupancy in hotels in Sharm El Sheikh plummeted by 42 percentage points to reach 28.5 per cent from 70.5 per cent in October 2015.
Average room rate at hotels in Sharm Al Shaikh in October also dropped by 11.5 per cent to $45.62.
The greatest margin of volume decline was in the leisure segment, with the drop equivalent to a year-on-year reduction of approximately 2,680 accommodated leisure room nights for an average hotel, HotStats said.
Elsewhere in the Middle East, profit conversion at Riyadh’s hotels fell to around 41 per cent of total revenue year-to-date 2016 from 46.4 per cent during the same period in 2015. This was on the back of falling revenues and rising costs.
In addition to declining revenue from rooms (down nearly 12 per cent), hotels in Riyadh also suffered increases in costs per available room, including labour (up 0.3 per cent) and overheads (up three per cent).
Since starting its downturn in October 2015, falling revenue levels have contributed to a 11.9 per cent decline in total revenue in the 12 months to October 2016, to $216, the HotStats report said. Increasing costs have added to the woes of Riyadh hoteliers, and profit per room has now fallen by 20.8 per cent in the last 12 months to $92.
