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Sharm El Sheikh Sharm El Sheikh

Hotstats MENA Chain Hotels Market Review February 2017

Hotstats has released its latest report, MENA Chain Hotels Market Review February 2017, revealing mixed results across the region, with effective cost cutting in Abu Dhabi, falling revenue in Doha and signs of recovery in Sharm El Sheikh.

Cutting Costs Drove Profit in Abu Dhabi

In February, properties in Abu Dhabi saw a 7.7 percent boost in total revenue, which converted to a 29.4 percent increase in profit per room, a result of hoteliers successfully slashing costs.

In the face of a 22.4 percent year-on-year increase in RevPAR, declining non-room revenues, including a 9.4 percent drop in food and beverage, along with an 11.3 percent fall in conference and banqueting, resulted in a 7.7 percent plummet in total RevPAR, down to USD237.09.

However, this was overcome thanks to stringent cost-cutting, including a 3.4 percentage point reduction in payroll, to 27.1 percent of total revenue, meaning that profit per room reached USD92.64, up 29.4 percent over the corresponding period in 2016.


Challenges Continue in Doha

Hotels in Doha recorded a 20.4 percent year-on-year decrease in profit per room in February, further contributing to the 24 percent fall in this measure in the 12 months to February.

In addition to a 6.9 percent drop in rooms revenue, properties also experienced a 9.8 percent drop in total RevPAR to USD313.31, driven by declines in food and beverage as well as conference and banqueting, down 11.6 percent and 19.1 percent, respectively.

Addresses in the capital continue to be affected by the economic impact of the oil prices.

Due to this, on a rolling 12-month basis, profit per room has plummeted 34.3 percent in the last two years.


Profit Loss Despite Revenue Uplift in Sharm El Sheikh

Although hotels in Sharm El Sheikh achieved a 57 percent year-on-year boost in total revenue in February, profit per room remained in negative territory, with a loss of USD1.33.

Nevertheless, recovery is underway with a 112 percent surge in RevPAR in the first two months of the year, as well as an 8.7 percentage point boost in occupancy compared to the same period in 2016.

Furthermore, hoteliers reported a 61.5 percent increase in achieved average room rate, to USD34.84.

Despite these successes, profit per room was offset by high costs, including payroll as well as overheads, accounting for 39.7 percent and 56.2 percent of total revenue, in that order.