Wednesday 13 December 2017
 
»
 
»
Story

Leisure demand fuels profit growth at Dubai hotels

DUBAI, June 18, 2017

Strong growth in both volume and price in the leisure segment in April helped hotels in Dubai secure one of the most significant increases in top and bottom line performance in recent years, according to the latest data from HotStats.

Whilst hotels in Dubai recorded a 5.4 percentage point increase in room occupancy, to 87.8 per cent, the growth in revenue per available room (RevPAR) was also fuelled by the 11.4 per cent increase in achieved average room rate with year-on-year growth in segment rates recorded in the individual (up 15.6 per cent) and group (up 2.4 per cent) segments.

The strength of demand from the leisure segment meant that individual and group leisure volume accounted for 60 per cent of total demand in April, compared to 48.8 per cent of the total in the 12 months to April 2017.

In addition to the 13 per cent increase in total revenue per available room (TrevPAR), hotels in Dubai were able to successfully cut costs, illustrated by the 1.9 percentage point drop in payroll to 20.0 per cent of total revenue, to drive a 20.7 per cent increase in profit per room in April.

Dubai hoteliers will be hoping that the growth this month represents the beginning of the recovery after the recent torrid period of operation following the crash in oil prices.

Kuwait hoteliers slash costs to boost profit performance

Hotels in Kuwait recorded an 11.0 per cent increase in profit per room this month, which was on the back of a 6.9 per cent TrevPAR increase as astute hoteliers cut costs.

Whilst hotels in Kuwait recorded an 11.8 per cent year-on-year increase in RevPAR, due to a 5.3 percentage point increase in room occupancy as well as a 2.7 per cent increase in achieved average room rate, this was not directly translated to total revenue, due to falling non-rooms revenue.

However, in addition to the growth in TrevPAR, cost savings in both payroll (up 1.7 per cent) and overheads (up 3.5 per cent) on a per available room basis, contributed to the $15.27 increase in profit per room in April.

Despite the strong performance, the growth this month was not sufficient to offset the 6.2 per cent decline in profit per room suffered in Q1 2017. As a result, year-to-date GOPPAR fell by 1.2 per cent to $120.96.

Bahrain Grand Prix drives bumper month for Manama hotels

Hotels in Manama recorded a 32.0 per cent increase in profit per room this month, which was driven by record-breaking room occupancy levels as a result of the nearby F1 Bahrain Grand Prix.

As the nearest major conurbation with a reasonable volume of required hotel accommodation, the Bahrain Grand Prix is always a strong driver of demand for hotels in Manama. Furthermore, the timing of the event in 2017 meant that the preparation and race period all fell within the month of April, rather than being spread over late-March and early-April, as in 2016.

As a result, hotels in Manama recorded a 10.4 percentage point increase in room occupancy, to 69.0 per cent, the highest monthly room occupancy level recorded in the Bahrain capital for a number of years.

Whilst the year-on-year growth in achieved average room rate was more measured, at 2.0 per cent, to $194.14, this rate level has only been exceeded once in the last 18 months, which was in December 2016, further illustrating the benefit of the Grand Prix to Manama hoteliers.

As a result of the movement in occupancy and rate, RevPAR at hotels in Manama increased by 20.1 per cent. And with the increases recorded in non-rooms revenues, including Food and Beverage (up 11.7 per cent), hotels in Manama recorded a 17.1 per cent increase in TrevPAR, to $204.72. In spite of a slight increase in costs, the strong volume fuelled a $19.71 uplift in profit per room, to $81.27. - TradeArabia News Service




Tags: hotel | tourism | demand | RevPAR | Leisure | Occupancy |

More Travel, Tourism & Hospitality Stories

calendarCalendar of Events

Ads