Market Reports

MENA Chain Hotels Market Review - November 2019

Two consecutive months of profit growth gave way to a contraction in November for hotels in the Middle East & North Africa as GOPPAR declined 1.7% year-over-year, according to data from HotStats.
Unkown Middle Eastern destination
MENA Chain Hotels Market Review - November 2019

HotStats

Two consecutive months of profit growth gave way to a contraction in November for hotels in the Middle East & North Africa as GOPPAR declined 1.7% year-over-year, according to data from HotStats. The region had a nice, albeit short, run of GOPPAR gains prior to November’s downtick, but the drop is more in line with MENA’s overall dim 2019 performance. If there is a silver lining, the 1.7% drop is the smallest YOY decrease of the year and far smaller than the YTD number of -4.2%.

Rooms revenue was down 2.6% compared to the same month last year, dragged down by a 5.1% drop in room rate. Occupancy for the month was up 1.9 percentage points to 76.2%.

The drop in rooms RevPAR, along with a 1.5% YOY decrease in F&B RevPAR, equated into an overall decrease in total revenue of 2.7% YOY.

And while generating revenue in November proved onerous, expense control was a bright spot. Total overhead costs on a per-available-room basis were down 3.4% YOY and total labour costs were also down—2.4% YOY. Utility expenses came down 3.0%, while overall Property & Maintenance costs were down 2.6%.

Profit & Loss Performance Indicators – Middle East & North Africa (in USD)

KPI

November 2019 v. November 2018

RevPAR

-2.6% to $122.61

TRevPAR

-2.7% to $212.10

Payroll

-2.4% to $55.56

GOPPAR

-1.7% to $85.42

In contrast to the totality of MENA, Egypt pushed out a positive month of profit, with a 2.9% overall YOY jump. This came on the back of a 1.3% rise in RevPAR and a 3.6% rise in TRevPAR.

The resort town of Sharm el-Sheikh saw a huge GOPPAR leap of 65.1% YOY, bolstered by a 28.6% jump in RevPAR. The fortunes of Sharm el-Sheikh hotels have turned for the better after having dealt with its share of terrorist attacks, including in 2005 and, in 2015, when a Russian jetliner departed the city and subsequently exploded over Sinai killing 224 people onboard. Thereafter, the UK grounded flights to the beach getaway, and weekly arrivals fell from 10,000 to zero. In December, flights resumed from the UK, which should put a further jolt into the resort town’s tourism economy.

Meanwhile, Egypt’s capital, Cairo, did not share the same fortune, checking in with a 1.5% decrease in GOPPAR YOY. RevPAR was down 3.4% YOY, a result of both a drop in rate (down 1.9%) and occupancy (down 1.2 percentage points). TRevPAR for the month was up 0.8% due to a 9.2% YOY increase in F&B RevPAR.

Profit & Loss Performance Indicators – Egypt (in USD)

KPI

November 2019 v. November 2018

RevPAR

-3.4% to $67.11

TRevPAR

+0.8% to $114.05

Payroll

+9.9% to $17.10

GOPPAR

-1.5% to $58.47

It was another down month for Dubai, which saw its profit drop 9.6% YOY. The emirate has only had one month of YOY GOPPAR growth in the last 15, plagued by excessive and unabated hotel supply and development. Coming months and years will require hoteliers to be more cost-conscious than revenue-conscious, according to many experts.

RevPAR in Dubai was down 9.3% YOY in November, as room rate dropped 8.6% YOY combined with a -0.7% percentage-point decline in occupancy. Total overhead costs declined in the month, down 6.2% YOY, but not enough to produce positive profit growth, evidenced by a 0.4 percentage-point decline in profit margin.

Profit & Loss Performance Indicators – Dubai (in USD)

KPI

November 2019 v. November 2018

RevPAR

-9.3% to $183.11

TRevPAR

-8.6% to $313.66

Payroll

-8.1% to $73.73

GOPPAR

-9.6% to $135.41

About HotStats

HotStats provides a unique profit-and-loss benchmarking service to hoteliers from across the globe that enables monthly comparison of hotels’ performance against competitors. It is distinguished by the fact that it maintains in excess of 500 key performance metrics covering 70 areas of hotel revenue, cost, profit and statistics, providing far deeper insight into the hotel operation than any other tool. The HotStats database totals millions of hotel rooms worldwide. For more information, visit www.hotstats.com. To request a demo of the HotStats platform, please click here.



Logos, product and company names mentioned are the property of their respective owners.