While 2019 may have been a year to forget for Middle East and North Africa hotels, the beginning of the new year kicked off on a high note.
NB: This is an article from Hotstats
Profit in January was up 7.7% YOY on a per-available-room basis, driven by top-line gains, including a 3.4% YOY increase in RevPAR, which was noticeably all occupancy driven. Average room rate in the month was down 4.7%, but a rise in occupancy of 5.6 percentage points to 71.6% pushed RevPAR into positive territory. Net RevPAR was up 3.0% YOY.
Total revenue in the month grew 1.9% YOY as total F&B revenue grew 1.4% YOY on a per-available-room basis, coupled with a healthy 16.1% YOY jump in revenue from conference & banqueting.
The growth in revenue was outdone by overall profit growth, which was secured by operators’ deft expense control and flow-through. Expenses in the Rooms department were down 0.8% YOY on a per-available-room basis, which helped lead to a 4.1% YOY increase in rooms profit. Total expenses in the F&B department were down 3.9% YOY, helping lead to total profit growth of 6.8% YOY.
In the undistributed departments, the news was also positive. All the departments were either down to flat YOY on a per-available-room, including A&G expenses (down 2.6%) and Property & Maintenance (down 2.2%), inclusive of a 3.3% YOY decrease in utilities.
Total labor costs were down 3.5% YOY on a per-available-room basis and down 1.4 percentage points as a percentage of total revenue.
The strong expense control led to the YOY profit jump and a 2.3 percentage point increase in profit margin to 42.2%.
Profit & Loss Performance Indicators – Total MENA (in EUR)
| KPI | January 2020 v. January 2019 |
| RevPAR | +3.4% to €117.26 |
| TRevPAR | +1.9% to €194.42 |
| Payroll | -3.5% to €52.56 |
| GOPPAR | +7.7% to €82.08 |
Riyadh hotels saw robust growth in both revenue and profit with RevPAR jumping 17.9% YOY and GOPPAR up 22.1% YOY. Similar to the overall MENA numbers, RevPAR in January was led by growth in occupancy (up 12.8 percentage points to 74.8%), as average room rate fell 2.3% YOY.
Total revenue was up 15.3% YOY on a per-available-room basis, with total F&B revenue up double-digits YOY at 10.5%.
Unlike the broader MENA, expenses, especially in the undistributed departments, did increase YOY in January on a per-available-room basis, led by a 7.3% YOY increase in Property & Maintenance costs.
Meanwhile, total labor costs on a per-available-room basis were up 11.0% YOY, but down 1.2 percentage points as a percentage of total revenue.
Profit & Loss Performance Indicators – Riyadh (in EUR)
| KPI | January 2020 v. January 2019 |
| RevPAR | +17.9% to €127.64 |
| TRevPAR | +15.3% to €210.38 |
| Payroll | +11.0% to €70.45 |
| GOPPAR | +22.1% to €84.90 |
In Dubai, rooms RevPAR was flat, as an uptick of 3.7 percentage points in occupancy was blunted by a 4.3% YOY drop in rate. As a result, TRevPAR was negative for the month, down 1.7% YOY. Still, strong expense control led to positive GOPPAR growth, which increased 5.1% YOY.
Total hotels labor costs as a percentage of total revenue were down 2.5 percentage points in the month. Total expenses on a per-occupied-room basis were down 9.2% YOY.
Profit margin was up 3.3 percentage points to 51.1%.
Profit & Loss Performance Indicators – Dubai (in EUR)
| KPI | January 2020 v. January 2019 |
| RevPAR | 0.0% to €184.41 |
| TRevPAR | -1.7%% to €287.52 |
| Payroll | -12.7% to €60.85 |
| GOPPAR | +5.1% to €146.93 |
