Dubai hotel profits fall 17% along with weak performance for Manama hotels: 

Five and four star hotels in Dubai continued to experience weakening average room rates (ARR) in October, falling 8.1% to US$312.08 whilst occupancy levels remained strong, albeit marginally lower than the same period last year at 82.9%.

The decrease in revenue per available room (RevPAR) was compounded by significantly lower food and beverage revenues which fell 12.0%, driving total revenue per available Room (TRevPAR) 8.8% lower, to US$423.54. Higher operating expenses compounded lower overall revenues, reducing gross operating profit per available room (GOPPAR) by 17.0% to US$194.64.

After reporting strong results in September, four and five star hotels in Manama witnessed a decline in all performance indicators in October, driven by weak demand.

Occupancy levels fell 6.2 percentage points to 50.8%, impacting ARR and RevPAR which fell 14.6% and 24.0% respectively. Although beverage revenues increased 5.6% during the month, the increase was unable to offset declines in food and banqueting revenues.

Softer TRevPAR levels and increased operational expenses impacted profit margins with GOPPAR falling 41.2% to US$47.31.

Rise in profits for Amman and Riyadh hotels

Hotels in Amman witnessed a 9.1 percentage point growth in occupancy to 67.9% in October, offsetting a 5.6% decline in ARR. The renewed demand drove an increase in all performance indicators including RevPAR which rose 8.9% to US$103.24.

Conference and banqueting revenues grew 34.7% during the month, contributing to a 9.7% increase in TRevPAR to US$168.49. Stronger top line revenues coupled with lower operational expenses resulted in GOPPAR rising 38.8%to US$67.70

Riyadh hotels witnessed strong demand levels in October with four and five star hotels recording a 12.0 percentage point increase in occupancy to 66.3%. However, hoteliers were unable to capitalise on the strong demand as ARR fell by a marginal 1.1% to US$226.07.

The increased occupancy levels had a positive effect on the remaining performance indicators with RevPAR and TRevPAR rising 20.8% and 18.5% respectively. Lower operational expenses allowed GOPPAR to increase 36.0% to US$117.94.

Soft demand in Doha impacts hotel performance

Although Doha is witnessing increasing economic activity, the city’s hotel market saw demand levels fall in October with occupancy dropping 1.4 percentage points to 74.9%. The fall in demand impacted all remaining performance indicators with ARR and RevPAR dropping 12.7% and 14.3%, respectively.

Higher F&B demand offset the softer room revenue; however it was not sufficient enough to prevent GOPPAR reducing 8.6% to US$160.78.