Profit per room at hotels in the Middle East & Africa climbed to $96.95 this month – One of the top performing markets in the Middle East & Africa this month was a resurgent Cairo – The growth in GOPPAR at hotels in Giza was led by a 15.0% year-on-year increase in TrevPAR
Hotels in the Middle East & Africa successfully cut costs to fuel a 4.6% year-on-year increase in profit per room this month, which was in spite of a mixed revenue performance, according to the latest worldwide poll of full-service hotels from HotStats.
Profit per room at hotels in the Middle East & Africa climbed to $96.95 this month, which was primarily thanks to cost savings, which included a 0.3-percentage point reduction in Payroll levels, to 24.2% of total revenue, as well as a 0.5-percentage point drop in Overheads, to 22.9% of total revenue.
Top-line performance at hotels in the Middle East & Africa was positive, recording a 3.3% increase in RevPAR, which was as a result of a 4.3-percentage point uplift in room occupancy, to 74.0%, and was in spite of a 2.6% decline in achieved average room rate, to $175.24.
However, declines in Non-Rooms Revenues, including Food & Beverage (-0.3%) and Conference & Banqueting (-2.4%), meant year-on-year TrevPAR growth fell to just 1.6%, to $223.64.
In addition to falling ancillary revenues, which have challenged TrevPAR levels in Q1 2018, the standout issue at hotels in the Middle East & Africa is plummeting room rates.
For the year-to-date, hotels in the region have recorded significant declines across most sectors, which have included Best Available Rate (-8.5%), Residential Conference (-9.9%), Corporate (-7.9%) and Group Leisure (-6.6%) segments.
As a result, RevPAR for Q1 2018 has fallen by 0.5% to $176.43, against the same period in 2017, which was despite a 3.0-percentage point uplift in room occupancy to 71.2%.
Profit & Loss Key Performance Indicators – Middle East & Africa (in USD)
March 2018 v March 2017
RevPAR: +3.3% to $129.62
TrevPAR: +1.6% to $223.64
Payroll: -0.3 pts to 24.2%
GOPPAR: +4.6% to $96.95
At $96.95 per available room, March was one of the strongest months of GOPPAR performance for hotels in the Middle East & Africa in the last 12 months, behind only April 2017 ($106.06) and November 2017 ($101.21) and should signal a robust couple of months of trading before hotels in the region hit the challenging summer period.
As a result of the movement in revenue and costs, profit conversion at hotels in the Middle East & Africa was recorded at a punchy 43.4% of total revenue, which contributed to the conversion of 41.6% of total revenue for Q1 2018.
The profit conversion for year-to-date 2018 is slightly above that recorded in the same period in 2017, at 41.0%, suggesting that hotels in the Middle East & Africa are becoming more efficient, which will be welcome news for hotel owners and operators in the region.
One of the top performing markets in the Middle East & Africa this month was a resurgent Cairo, which recorded a 16.0% year-on-year increase in profit per room for the month, which contributed to the 10.1% increase in GOPPAR at hotels in the Egyptian capital in Q1 2018.
The contribution this quarter means that hotels in Cairo are gearing up for another successful year of operation following the profit growth in 2016 (+49.5-percent) and 2017 (+68.0-percent).
The increase in profit per room at hotels in Cairo in March was driven by a 14.3% year-on-year increase in RevPAR, which was primarily due to an 8.5-percentage point uplift in room occupancy, to 74.0%, as well as a 1.3% increase in achieved average room rate, to $84.36.
The additional volume generated by hotels in Cairo is driving Non-Rooms Revenues, which included a significant year-on-year increase in Food and Beverage (+28.7%), Conference and Banqueting (+38.1%) and Leisure (+42.9%).
After the political and economic challenges which faced Cairo in recent years, the Egyptian capital has recovered significant ground and at a rapid pace, with TrevPAR levels in the 12 months to March 2018 ($97.64) having more than doubled over the last 24 months, from $48.31 in the 12 months to March 2016.
Profit & Loss Key Performance Indicators – Cairo (in USD)
March 2018 v March 2017
RevPAR: +14.3% to $62.41
TrevPAR: +15.1% to $102.19
Payroll: -1.6 pts to 14.9%
GOPPAR: +16.0% to $56.00
In addition to the positive top line performance, hotels in Cairo recorded a 1.6-percentage point saving in Payroll to 14.9% of total revenue, which contributed to the profit conversion of 54.8% of total revenue in March.
As a result of the movement in revenue and cost, profit per room at hotels in Egypt has increased by almost 190% in the 36 months to March 2018, to $52.64 in the 12 months to March 2018 from $18.20 per available room during the same period in 2014/15.
“Cairo has been through some tough times in recent years, including the Arab Spring, their worst recession since the 1930s, a military coup and numerous terror attacks.
If there is a silver cloud in such devastation, it is that hotels in the Egyptian capital are now amongst the most efficient in the entire region, regularly recording a profit conversion of more than 50% of total revenue. It is pleasing to see them performing so well,” added Pablo.
In line with the growth in the Egyptian capital, hotels in Giza recorded a positive month of profit performance in March, with GOPPAR increasing by 16.4% year-on-year, to $46.14.
The growth in GOPPAR at hotels in Giza was led by a 15.0% year-on-year increase in TrevPAR, to $93.92, which was primarily due to a 10.9% increase in RevPAR, to $62.88.
For hotels in Giza, the increase in Rooms Revenue this month was driven by a 6.0-percentage point increase in room occupancy, to 77.6%, as volume continues to recover across Egypt, as well as a 2.4% increase in achieved average room rate, to $81.04.
Profit & Loss Key Performance Indicators – Giza (in USD)
March 2018 v March 2017
RevPAR: +10.9% to $62.88
TrevPAR: +15.0% to $93.92
Payroll: -1.4 pts to 19.5%
GOPPAR: +16.4% to $46.14
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