MENA emerges from year of profit decline: HotStats

      Published on Friday, 25 October , 2019      456      
MENA emerges from year of profit decline: HotStats

  • Gulf News

After 12 consecutive months of year-over-year profit decline, gross operating profit per available room in the Middle East and North Africa region was up 10.9 percent in September, buoyed by a 4.9 percentage-point rise in occupancy and an increase in food-and-beverage revenue, according to the latest data from HotStats.

Revenue per available room for the month was up 5.1 percent year over year, only the third time this year that the region has shown positive year-over-year RevPAR growth.

While occupancy improved, the year-over-year average room rate dropped 2.3 percent. This, HotStats analysts noted, was “far less severe” than previous months: Since September 2018, only May of this year saw a positive year-over-year increase in rate. The analysts blame a “glut of supply in the region” for hoteliers’ inability to grow rate.

Year-to-date RevPAR is still down 1.9 percent year over year, dragged down by a 4.8 percent year-over-year decline in rate.

Total revenue for the month was strong, with total RevPAR up 4.1 percent year over year—underpinned by a 3.4 percent year over year rise in total food-and-beverage revenue—on a per-available-room basis. Like most MENA performance indicators, total RevPAR year-to-date is still down 1.7 percent year over year. Gross operating profit per available room “surged” during the month, the report noted, but is ultimately down 5.2 percent year to date.

Despite positive GOPPAR for the month, undistributed expenses were still up year over year, including total sales-and-marketing costs, which increased 6.1 percent year over year. Total hotel labor costs on a per-available-room basis were up 0.8 percent year over year, while total overhead costs for the month climbed 1.4 percent.

“It’s a relief to see hotels in the region finally make a year-over-year profit gain after months of negativity,” Michael Grove, managing director, EMEA, HotStats, said in a statement. “The onus will be on operators to keep the momentum going as the calendar moves into some of the historically highest-performing months of the year.”


Bahrain recorded a 7.5 percent year-over-year increase in GOPPAR, assisted by a 9.7 percent year-over-year increase in RevPAR and a 3.5 percent year-over-year reduction in hotel labor costs on a per-available-room basis.

The country has been “ripe” for hotel development in and around its capital city of Manama, the report noted. This includes two Accor projects opening soon under the Mama Shelter and Raffles brands.

Year to date, GOPPAR in Bahrain is still negative—but only slightly and “far more stable” than the region overall, analysts said.

Saudi Arabia

The whole of Saudi Arabia reported positive numbers in September. GOPPAR in September was up 8.4 percent year over year following an August where GOPPAR was down 9.6 percent year over year and an overall year so far that has seen violent double-digit positive and negative GOPPAR swings.

RevPAR for the month was up 8 percent year over year, underpinned by a 7.2 percentage-point jump in occupancy. Meanwhile, total revenue increased 6.5 percent year over year thanks to a 4.3 percent increase in food-and-beverage revenue on a per-available-room basis.

GOPPAR in the month was helped by a 1.5 percent drop in total labor costs and a 1.8 percent reduction in utility expenses.

The upturn in GOPPAR is propitious news for Saudi Arabia, where year-to-date GOPPAR is still down 8 percent year over year.

Category Gulf News | 2019/10/25 latest update at 11:04 AM
Source : Internet | Photocredit : Google
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