Arabian Hotel Investment Conference

April 2020 | United Arab Emirates

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March 2018: Cost Cutting Drives Profit Growth at Hotels in the Middle East & Africa

Posted on May 02, 2018

Profit per room at hotels in the Middle East & Africa climbed to $96.95 this month, which was primarily thanks to cost savings, which included a 0.3-percentage point reduction in Payroll levels, to 24.2% of total revenue, as well as a 0.5-percentage point drop in Overheads, to 22.9% of total revenue.Top-line performance at hotels in the Middle East & Africa was positive, recording a 3.3% increase in RevPAR, which was as a result of a 4.3-percentage point uplift in room occupancy, to 74.0%, and was in spite of a 2.6% decline in achieved average room rate, to $175.24.However, declines in Non-Rooms Revenues, including Food & Beverage (-0.3%) and Conference & Banqueting (-2.4%), meant year-on-year TrevPAR growth fell to just 1.6%, to $223.64.In addition to falling ancillary revenues, which have challenged TrevPAR levels in Q1 2018, the standout issue at hotels in the Middle East & Africa is plummeting room rates.For the year-to-date, hotels in the region have recorded significant declines...

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