Business | Tourism

Region’s hotels record highs and lows

In the region, Dubai hotels recorded highest profit margins in 36 months last year

  • By Sarah Algethami, Special to Gulf News
  • Published: 14:23 January 8, 2013
  • Gulf News

  • Image Credit: Gulf News archives
  • The Madinat Jumeirah and the Burj Al Arab hotel.

Dubai: Hotels in Dubai, Abu Dhabi, Cairo and Sharm Al Shaikh saw a growth in occupancy and earnings in November 2012, according to a recent report by TRI Hospitality Consulting.

In its Hotstats survey for the month, the TRI noted that Abu Dhabi hotels are suffering in their overall performance.

Dubai hotels, which recorded the highest profit margins in 36 months in the region, saw occupancy rates go up 3.1 per cent to 90.8 per cent in November, according to the report.

Average Room Rate (ARR) in Dubai hotels rose 1.6 per cent to $116.81, while Revenue per Available Room (RevPaR – an industry benchmark for performance) was up 5.2 per cent to $327.16. Also, Gross Operating Profit per Available Room (GOPPAR) was up 12.3 per cent to $297.15 - the highest regionally for November.

“Travellers from Western Europe flocked to the city as a number of bank holidays resulted in extended breaks in the EU. A number of high profile events including the World Parachuting Championships and the Helishow, aided in drawing a large number of visitors to the city,” said Peter Goddard, managing director of Dubai-based TRI Hospitality Consulting.

Meanwhile, Abu Dhabi hotels witnessed an increase in occupancy by two per cent to 83.5 per cent, among the highest regionally, yet ARR was down seven per cent to $202.72, decreasing RevPAR by 6.8 per cent to $169.32, stated the report.

Additionally, Total Revenue per Available Room (TRevPAR) was down 5.9 per cent to $316.31; while GOPPAR dropped 8.2 per cent to $162.80, both due to a decline in food and beverage revenues and conference banqueting revenues.

“Performance [of Abu Dhabi hotels] continues to suffer due to the perpetual pressure on rates as a result of new competition,” Goddard said.

But Abu Dhabi hotels can improve in their overall performance by offering guests value added services, like room packages, including free breakfast with rooms, Christopher Hewett of TRI Hospitality Consulting, told Gulf News.

He added that despite the challenges that will be faced by hotels in Abu Dhabi in the next two years, the situation will improve in the long-term.

“Looking forward, hotels in Abu Dhabi will improve, with the leisure demand increasing in Abu Dhabi, seen from the many leisure projects coming up, and Etihad Airways’ expansion which brings in more passengers to Abu Dhabi,” said Hewett. In North Africa, meanwhile, Egypt hotels showed signs of recovery since the unrest that had swept the country in early 2011. Hotels in Cairo recorded the highest profits in Mena, while hotels in Sharm el Sheikh have the highest occupancy rates, according to the survey.

It further indicated that hotels in Cairo saw earnings flourish in November, during which they recorded a 74.3 per cent increase in GOPPAR to $71.75. Additionally, RevPAR was up 32.3 per cent to $64.27. The occupancy rate, which rose by 14.3 per cent to 55 per cent, was the main driving force of RevPAR.

Meanwhile, hotels in Sharm el Sheikh recorded high occupancy rates, the survey indicated. Occupancy was up 7.7 per cent to 79.7 per cent, increasing RevPAR by 5.4 per cent to $41.66; while GOPPAR was up 5.2 per cent to $32.8. Also, TRevPAR in the city increased 8.7 per cent to $75.51, mainly driven by increase in revenues of food and beverages.

Sarah Algethami is a trainee at Gulf News.

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