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Fri 1 Sep 2006 04:00 AM

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Summer heat dries up the hotel business

The region’s DMCs and inbound specialists would have witnessed a revenue slump in June as Deloitte’s recent HotelBenchmark figures reveal hotel occupancies and revenues dived compared to May figures

June marked the start of the summer slump in terms of hotel revenue and occupancy levels, which compared unfavourably to May across the region.

This would have impacted profit margins for many DMCs and agents specialising in inbound travel to the Middle East, except for those based in Saudi Arabia, the only GCC country to buck the general trend.

The HotelBenchmark survey shows the country’s capital, Riyadh, gave the most steadfast performance of the month. All its figures show losses against May were minimal, and growth was achieved compared to June 2005.

The city’s hotels achieved occupancy of 81.4%, up 8.8% on 2005, and down only 3.3% on the previous month. Revenues also showed growth, with an average room rate of US $155, up 12.8% on 2005 and down only $2 on May. RevPAR also proved solid, at $126, up 22.8% on 2005.

At the other end of the scale, Doha’s hotel market appears to have hit the blocks. The Qatar capital was down on all figures against 2006 numbers. Doha’s hotels recorded occupancy of 69.6%, down 5.5% on 2005 and down 9.6% on May. Financially, Doha’s market showed huge declines. Average room rate sat at $194, down 28.7% on the previous year, while RevPAR dropped 32.6% against 2005 to hit $135.

Amman and Muscat also trailed in the occupancy race. Muscat recorded the lowest occupancy in the survey, at 46.6%, down 18.9% on 2005 and down 14.6% on May, while Amman’s occupancy dropped 17.5% on 2005 figures, to make 57.8%.

Higher room rates helped rescue Muscat from a complete washout, as the Oman city’s hotels achieved average room rate of $124, up 22.5% on 2005, while RevPAR levelled off at $58, only 0.7% down on the previous year.

Cairo fielded a fairly respectable performance, with occupancy at 62.4%, up 4.3% on 2005 and down only 3.2% on May, while RevPAR hit $52, up 21.1% on the previous year.

Dubai also presented a mixed bag of results, losing its top spot in a number of fields. Occupancy for the emirate was 76.6%, up a marginal 1.9% on 2005. However, revenues dropped below those of Doha for the first time, as Dubai’s average room rate made $178 against Doha’s $194. Dubai’s RevPAR remained top of the region though, at $136, $1 ahead of Doha.

Riyadh remains the market to watch at the moment, while other cities may need to reconsider pricing strategies if they are to continue attracting guests for the summer.

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