Chris Hewett, director, TRI Consulting. Chris Hewett, director, TRI Consulting.


Profit per room at hotels in the Middle East & Africa increased by 25.6% year-on-year in August, with multiple markets across the region benefitting from celebrations to mark the Eid al-Adha Holy festival, according to the latest data tracking full-service hotels from HotStats.

This was only the third month of profit growth at hotels in the Middle East & Africa this year, but it was the largest year-on-year margin of increase for at least a year, with GOPPAR hitting US $60.08 for the month—almost $25 above last month’s historic low at $35.81. Eid al-Adha is one of the most important festivals in the Islamic calendar and one of the most important months of trading for numerous hotel markets across the Middle East & Africa. Whilst the growth this month was certainly concentrated in particular markets, the strength of the uplift generated a positive impact across the entire region.

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Though year-to-date GOPPAR levels remain 2.1% behind the same period last year, at $69.69, the overall profit picture is a lot brighter now than it was as recent as July.

Profit growth in August was driven by an increase across all top-line revenues, which included growth in rooms (up 12%), food & beverage (up 2.5%) and conference & banqueting (up 10%) on a per available room basis, which contributed to the 8% increase in TRevPAR for the month to $179.33. The region also handled expenses more efficiently, securing a 1.4-percentage point saving in payroll, which dropped to 29.7% of total revenue, as well as a 1.8-percentage-point saving in overheads.

As a result of the movement in revenue and costs, profit conversion at hotels in the Middle East & Africa was recorded at 33.5% of total revenue in August, which is slightly below the margin for year-to-date 2018 at 35.8%, but illustrative of the positive performance of hotels in the region.


The key location to benefit from Eid al-Adha in August, as well as the Hajj celebration which precedes it, was Makkah, where profit per room soared by almost 100% year-on-year to $386.90.

The year-on-year growth in GOPPAR was driven by revenue increases across all departments. This included a 68.8% increase in RevPAR, which was fuelled by an 8.8-percentage point increase in room occupancy to 84.1%, as well as a 51.1% increase in achieved average room rate, which soared to $438.78.

As a result, RevPAR at hotels in Makkah was recorded at $368.93 this month, more than $190 above the year-to-date figure of $176.78. Meanwhile, due to higher ancillary spend this month, TRevPAR hit a peak at $506.41, with growth recorded across all non-rooms departments, including food & beverage (up 61.7%) and conference & banqueting (up 197.8%) on a per-available-room basis.

In addition to the growth in revenue, profit levels were further boosted by cost savings, led by a 5.3-percentage-point drop in payroll, which fell to just 8.7 percent of total revenue.

As a result of the movement in revenue and costs, profit conversion at hotels in Makkah was recorded at a robust 76.4% of total revenue.


In contrast to the positive performance at hotels in Makkah, it was a tougher month for commercial-led Kuwait City, where room occupancy levels fell by 3.8 percentage points, to 39.3%.

Whilst low volume levels are not uncommon for properties in the capital of Kuwait during the summer, the drop this month led to a 7.7% decline in RevPAR to $84.01; this despite a 1.4% year-on-year increase in achieved average room rate to $213.94.

The drop in rooms revenue was accompanied by declines in non-rooms revenue, which contributed to the 3.5% year-on-year decrease in TrevPAR to $159.11. In addition to the drop in revenues, hotels in Kuwait City suffered a 1.5-percentage-point payroll increase this month to 36.8%.

However, savings in unallocated expenses, which included a drop in admin & general (down 43.6%), sales & marketing (down 17.1%) and property & maintenance (down 8.6%), on a per-available-room basis, ameliorated the drop in revenue and contributed to the 4.5% increase in profit per room to $51.61.