MENA Hotels Market Data: July 2018

HotStats MENA Chain Hotels Market Review — July 2018

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.

Did you like this story?
Click here for more

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.

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



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