STR says hotels are set to benefit from a double digit rise in average daily rates despite occupancy slump
Hoteliers in Jeddah are forecast to benefit from a double digit rise in average daily rates (ADR) despite occupancy falling to 13-year lows in October, according to a new report.
STR's preliminary October data for hotels in the Saudi city indicates rate-driven performance growth.
Based on daily data from October, Jeddah hotels reported a 12.5 percent increase in supply against a 9.1 percent rise in demand.
STR said occupancy fell by 3 percent to 50.4 percent compared to the same month last year while ADR jumped by 13.5 percent to SR871.40, driving a 10.1 percent increase in revenue per available room (RevPAR) to SR439.60.
Analysts said significant demand growth year over year was not enough to keep pace with a spike in supply.
That imbalance coupled with higher rates led to the lowest October occupancy level in Jeddah since 2004, said STR, adding that performance fluctuations have been common in Jeddah this year.