Calendar shift hurts MENA hotels in June

A long summer period affected hotel performance in 2019

The Merchant House, Bahrain
James McDonald 2019jamesmcdonaldphotographygooglemailcom
The Merchant House, Bahrain

HotStats is blaming June's 6.4% year-over-year decline in profit per room in Middle East and North Africa hotels to a calendar shift. Because the holy month of Ramadan was largely in May this year, hotel demand for the subsequent month was down significantly.

The 10.2% increase in room occupancy in June to 65% came at the expense of achieved average room rate, which plummeted 18% year over year to $149.12. Following the year-to-date peak in achieved average room rate at $183.65, which occurred in May, the metric fell almost $35 in June. 

The 2.7% decline in revenue per available room was tempered by an increase in ancillary revenue, which included a 0.2% uptick in food and beverage revenue and a 17.8% jump in leisure revenue.

As a result, total RevPAR at hotels across the region fell 1.4% in June to $171.34, and despite their best efforts to manage costs, illustrated by the 0.1% savings in payroll to $56.83 per available room, profit levels at MENA hotels fell to $47.25 in the month. This was the lowest profit per room recorded in 2019 and 57.1% below the year to date figure of $74.21.

The shift was particularly impactful for hotels in Makkah, Saudi Arabia, which suffered a 69.8% year-over-year drop in profit per room to $120.54. On the other hand, the study notes that this was on the back of an outstanding May, when gross operating profit per available room hit a recent high of $472.27.

For hotels in Makkah, the drop in profit was as a result of a decline across all metrics, led by a 59.5% decrease in RevPAR to $170.69, contributing to a 58.7% year-over-year decline in total RevPAR to $220.83.

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