Middle East & Africa hotels in September 2017

　　Following a summer of mixed fortunes, including a welcome year-on-year increase in profit per room in August, hotels in the Middle East & Africa were back to business as usual in September. GOPPAR levels sunk by 17.1 percent year-on-year, according to the latest worldwide poll of full-service hotels from HotStats. 

　　September typically marks a return to ‘normal’ trading conditions for hotels in the Middle East & Africa following the disruption during the summer. With room occupancy levels this month at 66 percent—well ahead of the average for the preceding three-month summer period at 57.5 percent—they looked to be back on track. However, a 10.8-percent decline in achieved average room rate to $158.67 wiped out the 1-percent increase in room occupancy and meant that hotels in the region suffered a 9.5-percent decline in RevPAR. At $105.80, RevPAR at hotels in the Middle East & Africa was 5.5 percent below the year-to-date average of $111.93.

　　The expected resurgence in performance at hotels in the region is characteristically led by the commercial sector. However, in addition to a drop in volume, a year-on-year decline in sector rates was recorded in the corporate (-8 percent) and residential conference (-8.6 percent) segments this month. In addition to the drop in rooms revenue, hotels in the Middle East & Africa recorded a decline in non-rooms revenue, which included a decrease in food and beverage (-1.7 percent) and leisure (-7 percent) revenue on a per available room basis. As a result, TrevPAR in the region fell by 6.5 percent year-on-year to $183.06.

　　In line with the growth in volume, a 2.4 percent increase in payroll levels was recorded at hotels in the Middle East & Africa to 29.9 percent of total revenue. However, the rising costs further exacerbated the issue of falling revenues. As a result, GOPPAR levels dropped by 17.1 percent to just $59.83. “Despite oil prices hitting a two-year high in late September, a number of key economies across the Middle East & Africa continue to face challenges as they come to terms with the reduction in oil output due to OPEC-imposed cuts and many look to non-oil industries to stimulate growth. The current challenges in the oil industry have seen Saudi Arabia fall into recession in Q2 2017 with the Qatar economy also struggling. Alongside this, the political landscape in the region is facing major issues. The current challenges in the Middle East & Africa suggest the hotel market will continue to struggle in the short term,” said Pablo Alonso, CEO of HotStats.