Profit per room in April dropped in the Middle East and North Africa region

Profit per room in April dropped in the Middle East and North Africa region
Published: 9 July 2019 - 11 a.m.
By: Evan Real

Hotel occupancy levels in the Middle East and North Africa surged to 78.2% in April, but it was not enough to prevent profit levels falling for an eighth consecutive month, according to the latest data from analytics firm HotStats.

Profit per room at hotels in the MENA region fell a further 2.9% in April to $92.95. Despite the decline, this was a high for 2019 and 9.1% above the year-to-date total gross operating profit (GOPPAR) figure at $85.19.

While occupancy was up, average room rate was down 4.1% year-on-year to $169.65. The combination equated into a 1% year-over-year drop in RevPAR to $132.70.

Beyond RevPAR, hotels in the region reported a 0.7% decrease in ancillary revenues, which contributed to a 0.9% decline in total RevPAR to $226.40. This was also a peak for 2019.

The profit performance of MENA hotels was further impacted by escalating payroll costs, which increased 1.6% year-on-year to $57.98, on a per room basis. This is equivalent to 25.6% of total revenue.

“The almost consistent year-over-year growth in room occupancy, amidst rapid increase in supply over the last 24 months, has been a positive story for hotels in the Middle East & North Africa. The challenge continues to be in the falling ADR and, consequently, gross operating profit,” Michael Grove, director, Hotel Intelligence, EMEA, HotStats said.

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