RAMADAN IN MEA
Whilst hotels in the Middle East & Africa achieved an overall increase of 2.9% in GOPPAR, the Holy Month was notable for the major disparity in performance across the region as a result of Ramadan and the subsequent Eid al-Fitr celebrations.
Despite the Middle East & Africa region performing ahead of the same period last year, with year-on-year increases in both top and bottom line metrics, the observing of Ramadan for almost the entire month of June meant that performance levels were some of the lowest recorded in the last 12 months.
This is no better exemplified than in room occupancy, which plummeted to 47.9% in June, which is well below the rolling average of 63.6% recorded in the 12-months to June 2017. Very low occupancies were recorded in a range of markets across the region, including Abu Dhabi (51.0%), and Kuwait (35.5%).
As a result of the reduced volume, hoteliers struggled to drive room rates, as well as non-rooms revenue levels, and regional TrevPAR fell to just $163.60, against a rolling 12-month average of $205.88.
Hotels in the Middle East & Africa region recorded a 2.9% increase in GOPPAR in June, which was in spite of a 0.8 percentage point increase in payroll, to 33.5% of total revenue. However, profit per room this month was 44.7% below the average for the 12-months to June 2017, at $80.68.
ABU DHABI
For hotels in Abu Dhabi, RevPAR fell to a monthly five-year low of just $49.96 in June, 48.7% below the average for the 12-months to June 2017, at $97.35. Despite hotels in the UAE capital converting an 8.1% decline in TrevPAR into a 16.6% increase in GOPPAR, as shrewd hoteliers slashed costs, a loss of -$5.09 was recorded at Abu Dhabi hotels this month.
The month of June has punctuated a challenging six months for hotels in Abu Dhabi, with year-to-date declines recorded across key metrics, including GOPPAR (-13.8%), to $51.71.
As a result, profit conversion has fallen to just 28.1% of total revenue in the six months to June 2017.
SHARM EL SHEIKH
In contrast, headline performance levels at hotels in Sharm El Sheikh increased by significant margins as the Red Sea resort benefited from a surge in tourism, including both Arab and domestic visitors, during the post-Ramadan Eid al-Fitr holidays, albeit from an extremely low base.
The 324.1% year-on-year growth in RevPAR for the month was led by a 13.8 percentage point increase in room occupancy, to 30.1%. The uplift in volume also enabled growth in non-rooms revenue to be achieved, including Food and Beverage (+175.3%), which contributed to the 239.3% increase in TrevPAR.
Despite the margins of growth, revenue levels at hotels in Sharm El Sheikh were not sufficient to outweigh the high cost base and hotels in the Red Sea resort recorded a $1.50 per available room loss for the month of June.
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