Riyadh, Dubai hotels named 2011 top performers

Hotels in Riyadh and Dubai were the best performers in the Middle East in 2011, according to latest data released by TRI Hospitality Consulting.

Hotels in the Saudi city posted the highest average room rates (ARR) of $261.89, the lowest payroll levels and the highest gross operating profit per available room (GOPPAR) of $138.01 of the cities covered.

Occupancy for the full year stood at 60.4 percent which, despite being the lowest among the four GCC cities surveyed, represented a growth of 4.6 percent over the previous year.

Dubai hotels reported strong growth in ARR during December and finished the year on top of the other regional markets in terms of occupancy, revenue per available room (RevPAR) and total revenue per available room (TRevPAR), according to the data.

Occupancy levels for the month at Dubai hotels moved up to 85.1 percent while the city saw a spike in ARR (up 12.4 percent) which resulted in a knock-on effect on both top line and bottom line.

For 2011, Dubai led the other markets in term of occupancy by a healthy margin, hitting 81.8 percent, while ARR rose 7.6 percent to $205.50 and GOPPAR increased more than five percent to $126.84.

According to the data, hotels in Abu Dhabi reported a 2.4 percent growth in occupancy during December, rising to 70.8 percent.

However, ARR for the month fell more than 23 percent compared to December 2010 and RevPAR dropped 20.7 percent.

For the full year 2011, Abu Dhabi hotels finished the year with the highest gain in terms of occupancy with a near-seven percent increase.

However, the UAE capital also registered the highest decline in ARR during the year, alongside Sharm El Sheikh in Egypt, after posting a 19.3 percent decline.

Jeddah hotels saw occupancy drop by 3.2 percent in December to 67.2 percent while ARR increased to $203.65 (up 5.8 percent), the TRI Hospitality statistics showed.

Occupancy and ARR for Jeddah hotels for the full year 2011 stood at 74.3 percent and $204.75 respectively.

Egypt saw the largest decline in hotel performance in the region, both in terms of December monthly and 2011 full year figures, as the country remained under the grip of popular unrest and political uncertainty.

Peter Goddard, managing director, TRI Hospitality Consulting, said: "In Egypt, a strong recovery in hotel demand is likely to be difficult as long as the risk of sporadic violence such as the latest episode in Port Said exist.

"2011 has brought mixed fortunes for the region in terms of hotel performance, with the Arab Spring being the biggest factor which influenced the markets."

He added: "Hotels in the UAE have so far been the largest beneficiaries with Dubai in the lead whilst we see a trickle down effect on hotels in other parts of UAE as well.

"Abu Dhabi is the only exception which saw a deep correction in rates which was perhaps inevitable given that the historic high performances were skewed by an acute shortage of supply."