Dubai hotels earn highest profits in Mena for third straight year

The survey, which measured the performance of full service hotels in seven Mena cities, showed that Dubai hotels enjoyed a 13.8% rise in Gross Operating Profits per Available Room (GOPPAR) to $240.46, the highest profits registered in the surveyed region.

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

"Occupancy levels remained stable albeit a 0.8 percentage point increase to 84.6%, with Average Room Rates (ARR) rising 3.6% 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," it added.

"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% to $186.45," said Peter Goddard, Managing Director at TRI Hospitality Consulting.

Over the full 12 months, Dubai hotels recorded an 8.1% jump in RevPAR ($238.48), a 6.8% rise in ARR ($292.99), and a 1.1% increase in occupancy (81.4%).

Elsewhere in the UAE, 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 percentage point increase in occupancy to 76.0%, attributed to an influx of corporate and leisure demand, the survey showed

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

"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% in comparison with 2011 figures," Goddard noted.

In Saudi Arabia, 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% with a 12.3 per cent increase in ARR to $229.07, the effects of which trickled down to GOPPAR increasing 16.6% to $108.11," the survey said.

On the other hand, Riyadh's hotel market performance slowed during the month of December, as occupancy fell 2.3 percentage points to 56.2%, as new market entrants imposed a redistribution of demand.

"New hotel openings in Riyadh are showing their impact on the market's overall performance as new entrants compete with existing properties forcing a reduction in performance indicators. This is likely to continue into to the New Year as a number of new properties including the Fairmont, Nobu Hospitality and Rosewood are all expected to open in 2013. Contrarily, Jeddah's performance, driven by strong corporate and leisure demand,
remained strong throughout the year, with bottom line profits increasing 24.2% to $133.64 compared with 2011," commented Goddard.