Posted on January 30, 2020
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)
KPI | December 2019 v. December2018 |
RevPAR | -7.4% to $126.70 |
TRevPAR | -6.5% to $221.99 |
Payroll | -7.3% to $53.30 |
GOPPAR | -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)
KPI | December 2019 v. December 2018 |
RevPAR | -1.4% to $89.67 |
TRevPAR | +0.2% to $177.87 |
Payroll | -3.3% to $59.48 |
GOPPAR | -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)
KPI | December 2019 v. December 2018 |
RevPAR | -8.9% to $189.42 |
TRevPAR | -8.5% to $318.65 |
Payroll | -8.3% to $64.43 |
GOPPAR | -9.4% to $150.61 |
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