Amman and Manama hotels generate highest revenues

Dubai: Jordan and Bahrain hotels topped the list for the largest increase in revenue per available room (RevPAR) in the MENA region, according to the latest report issued by Ernst & Young.

Hotels in Amman and Manama respectively reported a 54.9 per cent and 52.1 per cent increase in RevPAR for the first five months of the year, as revealed in E&Y’s Middle East Hotel Benchmark Survey for May 2012.

“Bahrain witnessed a period of stabilisation with year on year occupancies rising from 16 per cent in May 2011 to 39 per cent in May 2012,” said Yousuf Wahbah, Partner & Head of MENA Transaction Real Estate, E&Y.

The report further revealed that another city whose hotels showed an impressive increase in RevPAR was Beirut with a 30.8 per cent increase in revenues.

Occupancy levels in all three cities also notched during the five-month period. While Amman hotels reported a 27 percentage point increase in occupancy rates with total occupancy rising from 53 per cent in 2011 to 80 per cent in 2012, hotels in Manama and Beirut both reported a 14 percentage point increase in occupancy rates.

Hotels in Dubai, meanwhile, showed a 12.7 per cent increase in RevPAR for the first five months of the year, while those in Abu Dhabi reported an 11.2 per cent decrease in revenues for the same period.

Dubai hotels also witnessed a drop in average room rates (ARR) from $290 (Dh1,064) in April to $204 in May. “The coupled decrease in occupancy and average room rate has lead to a decline in RevPAR from a yearly high of $249 in April to $161 in May. This can be attributed to the seasonal nature of tourist demand to Dubai,” Wahbah points out.

The seasonal impact of the summer on Dubai’s hospitality sector is visible this year with occupancy steadily declining to 79% in May from a yearly high of 89 per cent in March.

“A key outcome of the financial crisis was the adaptability of operators in dealing with rate drops in the market. We should not infer that the seasonal declines would effect the yearly profitability of Dubai’s hotels. On the contrary, full year number could well beat market expectations,” said Wahbah.

Meanwhile, occupancy in Abu Dhabi hotels remained unchanged at 79 per cent for the same period. Hotels there also saw ARR declining 11.6 per cent with prices falling from an average $231 in 2011 to $204 in 2012.