HotStats reported a rise in room occupancy levels at hotels in the Middle East and Africa in December, boosting growth in revenue and profit. This positive performance marked a strong end to a year of mixed results for the region.
MEA hotels saw a 2.9-percent decline in average room rate last month to $189.18, although room occupancy rose 3.1 percent to 66.6 percent and RevPAR rose 1.8 percent to $125.94. Volume increased across most segments due to drops in average room rate in residential conference to 4.6 percent, individual leisure to 8.2 percent and group leisure to 9.2 percent. The rise in volume caused non-rooms revenues to rise in response, pushing total revenue per available room to increase 2.3 percent to $225.14. Food & beverage saw a 5.0-percent increase, while conference & banqueting rose 4.1 percent.
Profit levels at hotels in the MEA region also increased last month due to a 0.7-percent saving in payroll to 23.3 percent. GOPPAR increased 3.5 percent to $95.63 in response to the savings, creating a profit conversion of 42.5 percent of total revenue.
“The diversity of hotel markets across the Middle East & Africa and their key demand drivers means it always going to be a mixed bag of top and bottom line performance, but this year has been particularly volatile due to the ongoing oil crisis, political and economic instability and security concerns. It is therefore pleasing to report such a positive month of trading for hotels in the region at the end of 2017 and we look forward to profit performance recovering further in 2018,” Pablo Alonso, CEO of HotStats, said in a statement.
Abu Dhabi led as a strong performing market in the region last month, shifting the downward trend the city experienced throughout the year. Abu Dhabi achieved high profit and revenue levels with GOPPAR growing 15.9 percent to $78.66. The 9.0-percent increase to $117.33 in RevPAR was the main contributor to the revenue boost at hotels in the city.
Room occupancy also jumped 3.6 percent while average room rate reached 4.0 percent. The commercial segment allowed the city's hotels to achieve top line revenue growth. The residential and conference segment saw a 41.6-percent boost, while corporate saw a 6.3-percent boost despite the declines in the leisure segment. Conferences at ADNEC boosted demand for hotels last month, especially the International Diabetes Federation Congress.
Non-rooms revenues in the city also led to positive performance, pushing Abu Dhabi to achieve a record 4.8-percent rise in total RevPAR to $220.18. Top line revenue growth, along with cost savings including a 2.2-percent decline in payroll to 26.6 percent, led to GOPPAR increases.
Qatar's hotels couldn’t match the strong performance achieved in Abu Dhabi due to worsening political and economic struggles. The capital recorded plunging top and bottom line performance levels last month. Hotels in Doha saw a 2.4-percent drop in room occupancy to 61.0 percent, and a 7.8-percent decrease in average room rate to $163.08. These declines drove RevPAR down 11.4 percent YOY to $99.40.
Non-rooms revenues at hotels in Doha also saw significant declines, including food & beverage dropping 6.1 percent and conference and banqueting dropping 8.1 percent. These declines in non-room revenues pushed total RevPAR to drop 8.3 percent to $286.37 in response.
Rising costs, including a 1.9-percent payroll increase to 29.6 percent of the total revenue, forced revenue levels to decline even further. Hotels in the city saw GOPPAR levels drop 20.5 percent year-over-year to $81.08 in response.
“Despite the sanctions imposed by neighboring countries, economic growth in Qatar remained surprisingly robust in 2017, with further growth anticipated in 2018. However, the growth has primarily been through the construction sector and spurred by government-led initiatives; meanwhile, the tourism industry has been left floundering, evidenced by the performance of hotels in Doha this month,” Alonso said in a statement.