MENA Chain Hotels Market Review December 2011

Hotels in Riyadh achieved the highest Average Room Rate (ARR) and Gross Operating Profit Per Available Room (GOPPAR) in the region for the month of December and full year 2011, according to the latest HotStats survey by TRI Hospitality Consulting.

Monthly performance indicators for Riyadh hotels show marginal changes in occupancy (+1.2 percentage point) and ARR (- 3.0%) in December 2011 compared to the same period in 2010. For the full year 2011, hotels in Riyadh posted the highest ARR (US$261.89), the lowest payroll levels (17.6%) and the highest GOPPAR (US$138.01) amongst the six cities surveyed by Hot- Stats. Occupancy for the full year stood at 60.4% which, despite being the lowest amongst the four GCC cities surveyed, managed to post a growth of 4.6 percentage points during the year.

Jeddah hotels reported a somewhat opposite growth trend to Riyadh during the month. Occupancy in Jeddah dropped 3.2 percentage points in December 2011 to 67.2% while ARR increased to US$ 203.65 (+5.8%). GOPPAR levels for the month posted a notable drop of 13.7% to yield US$92.74 per available room. Occupancy and ARR for Jeddah hotels for the full year 2011 stood at 74.3% and US$204.75 respectively. However, despite achieving a TrevPAR just below Riyadh, the significantly higher payroll costs for hotels in Jeddah have had an impact on the profits, finishing the year with a GOPPAR of US$107.6, about three quarters of the profit achieved by Riyadh hotels.

Egypt saw the largest decline in hotel performance amongst the six cities surveyed by in the region, both in terms of December monthly and 2011 full year figures, as the country remained under the grip of popular unrest and political uncertainty since January 2011. The capital city of Cairo reported occupancy of 36.3% for the month, down by 37.1 percentage points from the previous year. However, ARR levels have held up despite the turmoil, dropping only by 4.4% from the previous year to close the month at US$117.47. Occupancy and ARR for the full year 2011 stood at 38.3% and US$121.02 respectively while TRevPAR and GOPPAR for the period were down by 39.8% and 56.1% compared to the respective figures in 2010.

Sharm El Sheikh, on the other hand, has fared better in terms of occupancy (52% in December) although average rates have remained subdued (US$53.79). The city posted the lowest profit levels for the month amongst the six cities covered in the HotStats survey with a GOPPAR of US$19.51. For the full year 2011, hotels in Sharm El Sheikh achieved an occupancy of 54.9% (31.1 percentage points lower than the previous year), an ARR of US$49.55 and GOPPAR of US$17.84. Consequently the city posted the largest full year decline in ARR (-19.3%), RevPAR (- 48.5%), TRevPAR (-44.6

“In Egypt, the inception of the democratically elected parliament and the reassurance from the military regime regarding the transfer of power have apparently softened the street protests in Cairo. However, a strong recovery in hotel demand is likely to be difficult as long as the risk of sporadic violence such as the latest episode in Port Said exist”, said Peter Goddard, managing director, TRI Hospitality Consulting in Dubai.

Click here ( Adobe Acrobat PDF file) to download the complete report including graphs.


TRI Hospitality Consulting provides a wide range of services to clients in the hotel sector. It has offices in London, Dubai and Madrid.


For more information contact:

Jonathan Langston, managing director 020 7892 2201

jonathan.langston@trihc.com

David Bailey, deputy managing director 020 7892 2202

david.bailey@trihc.com

Charles Scudamore, director 0207 892 2211

charles.scudamore@trihc.com

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