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Hotels in Dubai Post Highest Profits in MENA Region for Third Consecutive Year

By Issac John, Khaleej Times, Dubai, United Arab EmiratesMcClatchy-Tribune Regional News

Jan. 31, 2013--DUBAI -- Hotels in Dubai recorded the highest profits in the region in 2012 for the third consecutive year, according to the latest HotStats survey.

Monthly performance indicators for Dubai hotels shows that Gross Operating Profits per Available Room (GOPPAR) rose 13.8 per cent to $240.46, the highest profits registered in the surveyed region, shows the survey of full service hotels in seven Middle East and North African cities by TRI Hospitality Consulting.

"Bottom line performance levels were boosted by a 5.2 per cent growth in Total Revenue per Available Room (TRevPAR) and a 4.9 per cent reduction in operating expenses," the survey said.

"Occupancy levels remained stable albeit a 0.8 per centage point increase to 84.6 per cent, with Average Room Rates (ARR) rising 3.6 per cent to $322.93. The festive season spurred a growth in food and beverage and leisure revenues which assisted in driving the increase in TRevPAR to $497.19," the survey results show.

The latest data released by STR Global also confirm that hotel operators in Dubai have posted healthy full-year increases in room rates and revenues for 2012.

Dubai and Jeddah reported double digit rises in revenue per available room (RevPAR) for the year while they also posted the biggest increases in average daily rates (ADR) in the Middle East and Africa region. STR Global data showed that hotels in Jeddah saw an ADR rise of nine per cent in 2012 to more than $221 while Dubai's ADR increased 7.9 per cent to nearly $235.

The cities were two of four markets in the region to achieve double-digit RevPAR growth.

According to HotStats survey, Abu Dhabi hotels continued in their struggle to lift key performance indicators, which remained under pressure during the month of December despite a 6.7 per centage point increase in occupancy to 76.0 per cent, attributed to an influx of corporate and leisure demand.

"On-going rate reductions which are a by-product of the high competition in the capital, fuelled a 14.7 per cent reduction in ARR to $130.61. Although occupancy levels increased, the decline in ARR resulted in RevPAR falling by 6.5 per cent to $99.31 which impacted the bottom line by reducing GOPPAR 9.7 per cent to $90.53," the report said.

"December figures for Dubai reflect the continued trend in 2012 as Dubai's uninterrupted string of events, conferences, and festivals maintained a steady stream of demand allowing for GOPPAR levels to increase 13.8 per cent to $186.45. However, hotels in Abu Dhabi have failed to capitalise on record guest arrivals as hotels continue to struggle with falling rates which have slashed bottom line performance by 18.1 per cent in comparison with 2011 figures," said Peter Goddard, Managing Director at TRI Hospitality Consulting.

Hotels in Jeddah outperformed the previous year's performance figures for the month of December as demand surged in the city.

Hoteliers capitalised on an increased occupancy of 68.1 per cent with a 12.3 per cent increase in ARR to $229.07, the effects of which trickled down to GOPPAR increasing 16.6 per cent to $108.11.

"On the other hand, Riyadh's hotel market performance wilted during the month of December, as occupancy shrunk 2.3 per centage points to 56.2 per cent, as new market entrants imposed a redistribution of demand," it said.

ARR dropped 1.2 per cent to $260.73, reducing RevPAR 5.1 per cent to $146.42. The dispersion of corporate demand was reflected in a sharp decrease in meeting room revenues, reducing TRevPAR 4.2 per cent to $253.88 and dropping GOPPAR 11.1 per cent to $131.78.



(c)2013 the Khaleej Times (Dubai, United Arab Emirates)

Visit the Khaleej Times (Dubai, United Arab Emirates) at

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