Hotels in Jeddah increase profit growth by 14%
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Hotels in Jeddah witnessed a 15% growth in RevPAR, driving a 13.8% profit growth in June, revealed the HotStats survey by TRI Hospitality Consulting. Average occupancy at four and five star chain hotels in the city reached 85.4%, up by 5.8% points, with average room rates (ARR) increasing 7.2% to US$226.63 during the month, compared to the same period last year.
Revenue per available room (RevPAR) for the month surged 15.0% to US$193.62 leading to strong growth in profits in terms of gross operating profit per available room (GOPPAR) by 13.8% to US$147.95.
“Jeddah achieved the highest occupancy and profitability in the region in June as hotels capitalize on the strong summer demand. Jeddah is a summer holiday destination for domestic travelers as well as the summer seat of the Saudi government. The GOPPAR level of US$147.95 achieved by hotels in June is the highest in the city in the past three years. Jeddah is well positioned to perform well throughout the remainder of the year and into early 2013 as the domestic demand is continued to be strong until the Levant is safe to travel. In addition, Jeddah hotels will also benefit from the limited future supply anticipated to enter the market in the short term,” said Peter Goddard, managing director of TRI Hospitality Consulting in Dubai.
Riyadh hotel occupancy levels remained stable in June, contracting marginally by 0.1% points compared to this time last year. However, the ARR dropped 9.6%, causing a 9.8% fall in RevPAR. This reduction in top line revenues coupled with an increase in payroll by 2.2% resulted in GOPPAR falling 10.3% to US$129.80.