Jeddah hotels record increase in demand and profit

Properties outperform Riyadh, where occupancies and rates fell

Peter Goddard, managing director of TRI Hospitality Consulting
Peter Goddard, managing director of TRI Hospitality Consulting

Jeddah hotels recorded a RevPAR increase of 15% in June, compared to the same month in 2011, according to the new HotStats report, but revenues in Riyadh fell as the city entered the "summer slowdown".

Average occupancy reached 85.4% in Jeddah, up by 5.8%, while ARR was also up 7.2% to US $226.63.

The survey of four- and five-star hotels by TRI Hospitality Consulting showed that Gross Operating Profit Per Available Room (GOPPAR)  for the city was up by 13.8% to $147.95, while RevPAR averaged US $193.62.

Did you like this story?
Click here for more

Peter Goddard, managing director of TRI Hospitality Consulting in Dubai, said: “Jeddah achieved the highest occupancy and profitability in the region in June as hotels capitalise on the strong summer demand. Jeddah is a summer holiday destination for domestic travellers 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.”

Meanwhile, Riyadh recorded a drop in RevPAR of 9.8%, due to ARR falling 9.6% and occupancy levels contracting slightly. GOPPAR levels fell further, to US129.80, due to a payroll increase of 2.2%.

Goddard said: “The lower performance levels of Riyadh hotels in June reflect the annual performance cycle in which performance levels and profitability reduces in the summer months. The corporate and government segments which are the backbone of demand in the capital drop significantly, resulting in hotels applying discounts on rates to attract business.”

 

For all the latest hospitality news from UAE, Gulf countries and around the world, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page.

Most Popular

Newsletter

Reports

Human Capital Report 2017

Human Capital Report 2017

The second annual Hotelier Middle East Human Capital Report is designed to explore the issues, challenges and opportunities facing hospitality professionals responsible for the hotel industry’s most important asset – its people. The report combines the results of Hotelier Middle East's HR Leaders Survey with exclusive interviews with the region's senior human resources directors.

Hotelier Middle East Housekeeping Report 2016

Hotelier Middle East Housekeeping Report 2016

The Hotelier Middle East Housekeeping Report 2016 provides essential business insight into this critical hotel function, revealing a gradual move towards the use of automated management and a commitment to sustainability, concerns over recruitment, retention and staff outsourcing, and the potential to deliver much more, if only the industry's "image problem" can be reversed.

From the edition

From the magazine