Hotel occupancy in Dubai hotels dropped in February 2012 while the average room rate increased by nearly three per cent compared to the same month last year. “In Dubai, hotels reported a 4.3 percentage point drop in occupancy in February 2012 compared to the same period last year while the Average Room Rate (ARR) went up by 2.9 per cent to $312.4 (Dh 1,146). Although, this resulted in a two per cent drop in Revenue Per Available Room (RevPAR), a marginal growth in the non-room revenues appears to have helped the hotels limit the drop in Total Revenues Per Available Room (TrevPAR) which dropped marginally by 0.2 per cent. “On the bottom line, Dubai hotels posted a marginal growth of 0.9 per cent for the month compared to the same period last year, achieving a Gross Operating Profit Per Available Room (GOPPAR) of $299.96 (Dh1,200),” according to the latest HotStats survey of full-service hotels in six MENA cities by TRI Hospitality Consulting. Hotels in Abu Dhabi reported a drop in all major performance indicators in February 2012. In terms of the top line indicators, occupancy and ARR for February posted a decline 3.0 percentage points and 28.8 per cent respective to close the month at 76.2 per cent and US$173.85, dragging RevPAR down by 31.6 per cent to US$132.39 for the month. In terms of profits, GOPPAR for the month stood 35.3 per cent below the same period last year, making Abu Dhabi the only GCC city amongst the four surveyed by HotStats to post a GOPPAR decline during the month. “There was a notable decline in Abu Dhabi hotel performance in February compared to the same month last year. However, this is more due to the strong performance of the hotels last year rather than a flat performance this year as Abu Dhabi had hosted some mega events last February such as IDEX and Al Ain Aerobatic Show which boosted hotel demand. The next edition of IDEX is due only next year and Al Ain Aerobatic Show has been pushed forward to coincide with the UAE National Day this year. To put February numbers into perspective, an analysis of the month-on-month performance in Abu Dhabi shows a consistent improvement in occupancy and ARR for the last three months,” said Peter Goddard, managing director of TRI Hospitality Consulting in Dubai. The decline in hotel performance in the emirate was mainly caused by an influx of supply over the last 2-3 years as growth in supply outpaced the growth in demand. Major openings in the last few months include Park Hyatt Saadiyat Island, Jumeirah Etihad Towers, Westin Abu Dhabi, Hyatt Capital Gate and Sofitel Abu Dhabi Corniche, amongst others. The anticipated growth in supply has resulted in the government deciding to be selective in issuing new hotel licences in Abu Dhabi. “The decision to freeze or limit new hotel licenses does not surprise me as similar controls were enforced in the 1990’s, specifically the controlling of liquor licenses. In Abu Dhabi, the government has an equity stake in many hotels and thus have a vested interest in maintaining reasonable occupancy levels. The short term effect on occupancies and average daily rates of limiting hotel licenses is likely to be insignificant, albeit medium to long term, reduced number of hotels will mean higher occupancy and higher average daily rates.” added Goddard. Hotels in Egypt have started a recovery but they remain a long way from their previous highs prior to the Arab Spring, the survey said. Hotel performances in Cairo and Sharm El Sheikh have remained subdued since early 2011 when the popular uprising and related violence started. Full service hotels in Cairo reported occupancy of 41.2 per cent and ADR of US$110.19 in February. TrevPAR for the month was US$91.13 and GOPPAR stood at US$36.1. Occupancy levels in Sharm El Sheikh have remained relatively steady since December 2011 and stood at 52.0 per cent in February. ARR for the month was reported at US$42.26 while GOPPAR levels remained low at US$11.0. Although the monthly performance indicators for February 2012 for both cities show substantial growth over the same period last year, such a comparison may be irrelevant as the hotel performance last year reflected the aftermath of a violent start of the Egyptian Revolution which saw widespread protests and related violence across the country. Tourist arrivals in Egypt has declined by 32 per cent to 10.2 million visitors and revenues dropped by 30 per cent to US$9 billion in 2011 following the political uprising in the country. Although the street protests and violence have reduced, the risk of sporadic violence remains. Nevertheless, Egypt’s Ministry of Tourism has issued a positive outlook for 2012 and expects the country to receive 12-13 million visitors and revenues to improve to US$11 billion during the year. “Hoteliers are reporting greater stability on the ground which might reflect an improvement in hotel performance in the coming months. A strong recovery in tourism arrivals is unlikely as long as the risk of violence remains”, added Goddard. There were more encouraging results in Jeddah. Occupancy and Average Room Rates (ARR) at four and five star chain hotels in Jeddah increased 7.5 percentage points and 10.7 per cent respectively, compared to the same period last year as the city saw a surge in tourist activity during the closing weeks of Jeddah Shopping Festival. Occupancy for the month touched 79.5 per cent with ARR increasing to US$213.5. The city also hosted the second edition of Jeddah Travel and Tourism Exhibition (JTTX) in February which brought more than 200 exhibitors and over 10,000 visitors to the city during the three day event. Hotels in Riyadh reported mixed results in February. While occupancy levels increased to 70.8 per cent, ARR declined to US$267.36 albeit the changes in both metrics were marginal. Interestingly Total Revenue Per Available Room (TrevPAR) for the month saw a healthy growth during the month compared to last year, growing 8.7 per cent to reach US$307.02. The growth in revenues and a 1.5 percentage point drop in Payroll helped the hotels improve the bottom line as Gross Operating Profit Per Available Room (GOPPAR) for the month increased 8.1 per cent to $180.99. The survey is composed of 84 hotels with an average hotel size of 330 bedrooms.