Profit was hampered by a weak top line that saw RevPAR down 7.4% YOY, pulled down by a 9.9% YOY decrease in average rate, even amid a 1.9-percentage-point uptick in occupancy.
A tough year for Middle East & North Africa hoteliers mercifully came to an end in December, a month that didn’t help their overall yearly results. Profit per available room was down 5.4% year-over-year, negatively contributing to an overall 9.3% YOY GOPPAR drop for the year, according to data from HotStats.
Profit was hampered by a weak top line that saw RevPAR down 7.4% YOY, pulled down by a 9.9% YOY decrease in average rate, even amid a 1.9-percentage-point uptick in occupancy. Decreases that also occurred in the F&B department brought total revenue down 6.5% compared to the same time the year prior.
The month’s drop in profit was almost entirely a result of weakened revenue, as expenses were kept in check and, in some cases, came down. Total costs among the undistributed departments decreased, among them, Sales & Marketing (-6.5%), Information & Technology (-19.3%) and Property & Maintenance (-8.7%), which included an 11.0% YOY drop in utilities. Total expenses on a per-occupied-room basis were down 9.7% YOY for the month, while total payroll on a per-available-room basis was down 7.3% YOY.
Still, hoteliers couldn’t overcome the difficult revenue predicament, which not even expense containment could help, ultimately leading to a profit drop.
Hoteliers can take some solace in profit margin, which was up 0.5 percentage points to 41.0%.
Profit & Loss Performance Indicators – Total MENA (in USD)
December 2019 v. December2018
-7.4% to $126.70
-6.5% to $221.99
-7.3% to $53.30
-5.4% to $91.07
Bahrain stood witness to a year of violent swings on both the revenue and expense side of the coin. While RevPAR for the month was down 1.4% YOY, and TRevPAR was actually up 0.2%, GOPPAR was down a staggering 20.6% YOY. For the year, GOPPAR was down 3.2% YOY.
The story in December was expense. Costs were up across the undistributed departments, including Property & Maintenance (up 27.5%) and a 23.2% jump in utility expenses. Total overhead costs were up 18.5% YOY. Meanwhile, total labour costs were actually down 3.3% YOY on a per-available-room basis.
Profit margin for the month was down 4.9 percentage points to just 19%.
Profit & Loss Performance Indicators – Bahrain (in USD)
December 2019 v. December 2018
-1.4% to $89.67
+0.2% to $177.87
-3.3% to $59.48
-20.6% to $33.75
Hotel performance in December in Dubai mimicked the greater MENA region. The emirate took a hit on both the top line and bottom line, evidenced by an 8.9% YOY decline in RevPAR, which was heavily impacted by a 9.8% YOY drop in average rate, despite a 0.7-percentage-point increase in occupancy.
Total revenue was down 8.5% YOY and 13.6% for the year.
The precipitous drop in revenue carried through to profit. GOPPAR was down 9.4% YOY (18.6% for the year), dragged down further by an 8.0% YOY decrease in total expenses on a per-occupied-room basis.
The drop was even more striking considering that expenses on a whole were also down in December. Total expenses on a per-occupied-room basis were down 8% YOY, while payroll on a per-available-room basis was down 8.3%. Total utilities were also down to the tune of 14.7% YOY.
Profit margin was down 0.4 percentage points to 47.3%.
Profit & Loss Performance Indicators – Dubai (in USD)
December 2019 v. December 2018
-8.9% to $189.42
-8.5% to $318.65
-8.3% to $64.43
-9.4% to $150.61
MEA Markets is happy to announce that the MEA Business Awards are returning for the sixth consecutive year! This established awards programme identifies those individuals and companies who excel in their respective industries, encompassing the entirety of the Middle East and Africa in our search to highlight the firms that go above and beyond to establish themselves as business leaders.Visit our awards here
MEA Markets is very proud to host the UAE Business Awards 2023 for its seventh instalment! This awards programme aims to reward a vastly diverse range of hardworking businesses from across the United Arab Emirates region, who are demonstrating innovation and excellence throughout a turbulent economic climate many firms are suffering through.Visit our awards here