Expert analysis: MENA hotels market data September 2019

Philippe VercruySSe, senior consultant, TRI Consulting.
Philippe VercruySSe, senior consultant, TRI Consulting.


Middle East and North Africa hoteliers have cause for celebration in September. After 12 consecutive months of year-over-year profit decline, Gross Operating Profit per Available Room (GOPPAR) in the region was up 8.9% in the month, buoyed by a 4.9-percentage-point rise in occupancy and an uptick in food & beverage revenue, according to data from HotStats.

Revenue per Available Room (RevPAR) in the month was up 4.8% YOY, only the third time this year that the region has shown positive YOY growth in the key performance indicator. In addition to the rise in occupancy hotels saw a 5.0% decrease in YOY average room rate, which, though negative, was far less severe than in past months: Since September 2018, there has only been one month—May—where there was a positive YOY increase in rate. A glut of supply in the region is one of the factors hampering hoteliers’ ability to grow rate.

Total revenue for the month was another strong story, with Total Revenue Per Available Room (TRevPAR) up 4.0% YOY, underpinned by a 3.4% YOY rise in total F&B revenue, on a per-available-room basis.

The strong hotel performances in September helped improve the year-to-date RevPAR which is up by a marginal 0.3% YOY, dragged down by a 4.1% YOY decline in rate. In addition, TRevPAR YTD is still down 0.3% YOY, and while GOPPAR surged in the month, it too is down 1.7% YTD.

Despite positive GOPPAR for the month, undistributed expenses were still up YOY, including total sales & marketing costs, which increased 6.1% YOY. Total hotel labour costs on a per-available-room basis were up 0.8% YOY, while total overhead costs for the month climbed 1.4%.


Riding the overall wave of MENA success was Bahrain, which recorded a 7.5% YOY increase in GOPPAR, assisted by a 9.7% YOY increase in RevPAR and a 1.0% YOY reduction in hotel labour costs on a per-available-room basis.

The Kingdom has been ripe for hotel development in and around its capital city of Manama. The pipeline includes two Accor projects opening soon, under the Mama Shelter and Raffles brands.

YTD GOPPAR in Bahrain is still negative but only slightly and far more stable than overall MENA.

On the undistributed expense side, Bahrain saw cost savings on a per available room basis in Administrative & General expenses (down 5.2%) and Sales & Marketing (down 0.4%) but was hindered by a 22.4% jump in Property & Maintenance costs, which included a 3.1% lift in utility costs.

Saudi Arabia

The whole of Saudi Arabia reported positive numbers, too, in September after volatile year-to-date performances. GOPPAR in the month was up 8.4% YOY following an August where GOPPAR was down 9.6% YOY and an overall year so far that has seen double-digit positive and negative GOPPAR swings.

RevPAR for the month was up 8.0% YOY, underpinned by a 7.3-percentage-point jump in occupancy. Meanwhile, total revenue increased 6.6% YOY on the back of a 4.3% increase in F&B revenue on a per-available-room basis.

GOPPAR in the month was helped by a 2.5 percentage-point drop in labour costs and a 1.8% reduction in utility expenses. The upturn in GOPPAR is propitious news for Saudi Arabia, where YTD GOPPAR is still down 7.9% YOY and down 15.2% on a rolling 12-year basis.

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