By Andy Sambidge
Latest data shows retail events spur big rises in occupancy and revenues for Gulf cities
Shopping festivals helped hotels in Jeddah and Dubai register substantial growth in revenues and profits during January, according to the latest HotStats survey by TRI Hospitality Consulting.
Occupancy levels in Jeddah went up by 11.6 percent to 75.5 percent and average room rate (ARR) increased by 15.2 percent to $217.43, boosting revenue per available room (RevPAR) by 35.2 percent to $164.04.
The growth in the top line caused a surge in profit during the month as the gross operating profit per available room (GOPPAR) surged to $115.35, up by 63.7 percent over the same period in 2011.
The growth in hotel performance comes in the wake of the inaugural Jeddah Shopping Festival, also known as Hayya Jeddah 2012.
According to the event organisers, the month-long festival was expecting to attract over a million visitors to the city.
In Riyadh, however, hotels saw a dip in overall performance during the month as average occupancy dropped by 2 percent to 61.5 percent and ARR declined by 7.6 percent to $258.29.
The city witnessed a 10.5 percent drop in RevPAR and 6.2 percent drop in GOPPAR during the month making it the only GCC city among the four surveyed by HotStats to post a RevPAR decline.
Peter Goddard, managing director of TRI Hospitality Consulting in Dubai, said: "The Saudi Commission for Tourism and the local authorities are undertaking numerous initiatives to develop tourism, mainly focusing on attracting domestic travellers.
"Some of these programmes, such as the Jeddah Shopping Festival, are showing results."
In the UAE, hotels in Dubai achieved notable improvement across all performance measures in January and outperformed the other MENA markets surveyed by HotStats by a big margin.
Occupancy and ARR for the four and five star chain hotels in the emirate increased by 4.5 percent and 9.9 percent to touch 87.7 percent and $327.41 respectively as the city hosted the 17th edition of Dubai Shopping Festival (DSF).
Hotels across the city reported reported RevPAR rises of 15.8 percent to $287.25 and saw GOPPAR increase by 18 percent compared to January 2011.
"The DSF has given a solid start to the year and I believe that Dubai hotels will continue to see strong performance levels during 2012," said Goddard.
Abu Dhabi hotels reported a 10.3 percent growth in occupancy in January and closed the month with an overage occupancy of 74 percent.
However, ARR for the month dropped to $164.23 compared to $188.01 for the same period in 2011.
According to Abu Dhabi Tourism Authority, hotels in the emirate received 2.1 million guests in 2011.
"Abu Dhabi has witnessed a strong recovery in occupancy levels in 2011... However the growing competition in the city is likely to keep the pressure on performance in 2012 as more than 2,500 hotel rooms are expected to open in the city during the year," added Goddard.
In Egypt, the four and five star hotels surveyed by HotStats reported subdued performance in January as the continuing political uncertainty kept business and leisure visitors largely away.
Hotels in the capital Cairo reported occupancy of 36.8 percent and ARR of $116.18, down by 31.6 percent and 3.7 percent respectively from the same period last year.