UAE hotels see surge in May profits

UAE hotels see surge in profits driven by strong leisure and MICE demand. Dubai hotels reported a 30.9% growth in the gross operating profit per available room (GOPPAR), while Abu Dhabi saw a rise in GOPPAR by 31.6% due to a 14.7% rise in occupancy. These statistics were revealed in the HotStats survey by TRI Hospitality Consulting Middle East. 

UAE Hotels profits surge for May 2013
UAE Hotels profits surge for May 2013

Dubai’s hotel industry reaped visible benefits from the many international events. Hotel Revenue Per Available Room (RevPAR) in Dubai was boosted by a 6.6% growth in occupancy to 83.9% along with an 8.5% growth in Average Daily Rates (ADR) to US$282.72. Consequently, Total Revenue Per Available Room (TrevPAR) grew by 14.9% to US$439.51, boosting GOPPAR up by 30.9% to US$192.73.

Hotels in Abu Dhabi saw continuing decline in ARR, which reduced by 8.3% to US$124.68 in May, however, RevPAR grew by 15.1%, driven by an impressive 14.7% surge in occupancy to 72.1%. Supported by the growth in room revenue, TrevPAR increased by 12.2%, driving GOPPAR up by 31.6% from last year to US$61.37.

In Kuwait, May and June are considered as peak seasons for weddings and events, which typically boosts revenues for hotels. Although average rates declined by 1.7% to US$254.86, the 2.6% growth in occupancy to 57.2%, helped RevPAR increase by 3.1% to US$145.65. However, a substantial growth in dining and banqueting activities from increased wedding demand drove food and beverage revenues and increased TrevPAR by 13.5% to US$343.02. Consequently, GOPPAR for May stood at US$150.38, up by 8.6%, than the previous year.

Jeddah hotels continued to demonstrate impressive performance levels in May with occupancy growing by 1.3% to 84.3%; recording the highest occupancy out of the seven MENA markets surveyed. Average rates increased by 17.8% to US$259.34, driving a 19.7% and 25.2% growth in RevPAR and GOPPAR to US$218.61 to US$178.46 respectively.

The continued influx of supply into the Riyadh hotel market appears to be slowly eroding the average rate performance within the city, with the market witnessing a 2.7% decline in ARR in May to US$241.52. The city experienced a marginal growth in occupancy, which was up by 0.2% to 67.9%, however it was not enough to prevent the 2.4% decline in RevPAR to US$163.92. The reduction in top line revenues filtered through to bottom line performance as GOPPAR fell by 3.1% over last year, despite a small reduction in payroll expenses.

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