DATA LIBRARY
56 HOTELIER MIDDLE EAST | August 2019 | Volume 18 Issue 08
PERFORMANCE REVIEW - APRIL & MAY 2019
MENA HOTELS MARKET DATA
Expert
analysisMENA
Despite an almost double-digit uptick
in average room rate, year-over-year
(YOY) profit per room at hotels in the
Middle East and North Africa dropped
in May. Gross Operating Profit Per
Available Room (GOPPAR) fell 2.4% YOY
even though average room rate rose
9.7% to US$183.70, a high for the year.
The rise in Average Room Rate (ARR)
came at the expense of occupancy,
which dropped six percentage points
YOY. The decline appears to be an
unwanted trend and not an isolated
event. On a month-on-month basis,
room occupancy fell by almost 24 per-
centage points, to just 5.1%, a stark
contrast from the punchy top-line
performance in April.
RevPAR in the month was down 1.2%
YOY to $99.31. The drop in RevPAR
was exacerbated by a hit to ancillaryrevenues, with YOY declines recorded
in the food and beverage (down 2.2%)
and leisure (down 6.6%) departments,
on a per-available-room basis.
The movement across all revenue cen-
tres contributed to a ninth consecutive
month of TRevPAR decline for MENA
hotels, falling by 2.3% to $176.
It was also a ninth consecutive
month of GOPPAR decline, which was
not helped by a 0.1% increase in
payroll costs, which grew to $56 on a
per-available-room basis.
As a result of the movement in
revenue and costs, profit conver-
sion fell to 30.5% of total revenue
in the month. As the region enters
the stifling summer period, a margin
of decline between April and May is
common, albeit this year the negative
effect has been further compounded
by the beginning of Ramadan which
is now entering into spring period,
extending the period of low demand
for hotels across the region.OMAN
Hotels in Muscat had a particularly
rough go of it in May, indicative of a
massive 547% YOY decline in profit per
room, which fell to -$18.49.
Whilst it is not uncommon for hotels
in the capital of Oman to make a
loss through much of the summer as
volume levels drop, room occupancy
was recorded at just 33.8% in May,
the lowest level in recent years.The 13.1-percentage-point YOY drop
in room occupancy contributed to a
32.6% decline in RevPAR for the month
to $51.42, as well as a 19.7% YOY de-
crease in ancillary revenues to $71.67.
And whilst Muscat hoteliers were
able to react quickly to the top-line
decline and make a 15.4% saving in
payroll on a per-available-room basis,
it was not enough to prevent profit
levels from plummeting.EGYPT
Cairo, for the first time since the start
of the year, suffered declines in May,
as well. GOPPAR dropped by 56.4%
YOY to $17.17. This was the lowest level
of GOPPAR recorded in the Egyptian
capital since June 2016.
Both occupancy and rate dropped,
16.7-percentage points (40.6%) and 7.1%
($80.11), respectively. Growth in ancillary
revenues did little to offset the 34.2%
decline in RevPAR and, as a result,
TRevPAR fell by 24.5% to $64.27.PHILIPPE VERCRUYZZE
senior consultant, TRI ConsultingThe rise in ARR came
at the expense of oc-
cupancy, which dropped six
percentage points YOY. The
decline appears to be an
unwanted trend and not an
isolated event.”