The Doha hotel market experienced further reduction in demand in October with occupancy levels falling 4.7 percentage points to 70.4%.
The fall in demand impacted all remaining performance indicators with Average Room Rates (ARR) and Revenue per Available Room (RevPAR) dropping 12.6% and 18%, respectively. Lower F&B demand compounded the softer room revenue, with Gross Operating Profit per Available Room (GOPPAR) reducing 30.2% to US $113.84.
The soft performance in October has compounded the weakened market environment experienced in 2016 with RevPAR reducing 18.5 percentage points to US $120.91. The lower performance is attributed to falling ARR which has declined 12.4% and occupancy levels dropping 4.9 percentage points to 65.1%.
Strong food and beverage demand has historically offset declines in overall room’s revenue to increase Total Revenue per Available Room (TRevPAR); however utilisation levels have fallen over throughout the year, resulting in TRevPAR reducing 13.8% to US $296.27. Increased payroll and operating expenses continue to erode bottom line performance which dropped 23.3%.
As the Doha market and wider GCC continues to face challenges with soft oil prices, reduced government spending, a stronger US dollar and weaker economic activity, the hotel market is expected see performance levels continue to weaken into 2017.
Chris Hewett, Associate director, TRI Consulting
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