Hotels in Mena record profit dip in November

For hotels in the Middle East and North Africa, two consecutive months of profit growth gave way to a contraction in November as Dubai's hospitality sector recorded a profit drop of 9.6 per cent year-on-year, according to a HotStats Hospitality Intelligence report.
Challenged by excessive and unabated hotel supply and development, Goppar - gross operating profit per available room - of Dubai hotels declined by 9.6 per cent to $135.41 in November, said HotStats. "The coming months and years will require hoteliers to be more cost-conscious than revenue-conscious," hospitality industry experts say.
According to HotStats, due to the excessive supply RevPAR (revenue per available room) in Dubai was down 9.3 per cent year on year in November to $183.11, as room rates dropped 8.6 per cent combined with a -0.7 per cent percentage-point decline in occupancy. Total overhead costs declined in the month, down 6.2 per cent year-on-year, but not enough to produce positive profit growth, evidenced by a 0.4 percentage-point decline in profit margin.
In the Mena region, Goppar declined 1.7 per cent year-over-year, according HotStats. "The region had a nice, albeit short, run of Goppar gains prior to November's downtick, but the drop is more in line with Mena's overall dim 2019 performance. If there is a silver lining, the 1.7 per cent drop is the smallest yerar on year decrease of the year and far smaller than the year to date number of minus-4.2 per cent," said the report.
The Mena region's room revenue was down 2.6 per cent compared to the same month last year, dragged down by a 5.1 per cent drop in room rate. Occupancy for the month was up 1.9 percentage points to 76.2 per cent.
"The drop in rooms RevPAR, along with a 1.5 per cent year-on-year decrease in F&B RevPAR, equated into an overall decrease in total revenue of 2.7 per cent," said the report.
"And while generating revenue in November proved onerous, expense control was a bright spot. Total overhead costs on a per-available-room basis were down 3.4 per cent and total labour costs were also down - 2.4 per cent year-on-year. Utility expenses came down 3 per cent, while overall property and maintenance costs were down 2.6 per cent," the HotStats report said.
In contrast to Mena trend, Egypt pushed out a positive month of profit, with a 2.9 per cent overall year on year jump. This came on the back of a 1.3 per cent rise in RevPAR and a 3.6 per cent rise in TRevPAR (total revenue per available room).
- issacjohn@khaleejtimes.com