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Hotels in Jeddah Feature Skyrocketing Growth in July

News July was definitely a very profitable month for hotels in Jeddah as they posted the growth of profit of 30.9%. As it is stated in the latest report by TRI Hospitality Consulting, summer and the holy month of Ramadan have helped to boost performance of hotels of all segments and levels.

Jeddah accommodations featured very high occupancy. 4- and 5-star accommodations reached the occupancy of 83.9% that is 3.1% higher. Average room rates also went up and estimated US$229.39. That is 11% higher comparing to July 2011. The growth of two these figures helped to increase RevPAR (revenue per available room) by 15.4% to the level of US$192.47. TRevPAR (total revenue per available room) featured even a bigger increase – 19.2% to US$296.79. This has become possible thanks to growing revenues from food and beverage sales.

Such growth in revenues was coupled with a significant drop in operating expenses. Both payroll and operating costs went down and were lower comparing to the same period of 2011. Thanks to these changes profitability increased greatly and GOPPAR (gross operating profit per available room) went up by 30.9% to US$143.82.

However, the situation is not so optimistic throughout the country. For example, hotels in Riyadh suffered from a notable decline comparing to the previous year. Here the drop of occupancy of 3.2% to 46.5% made RevPAR go down by 5.6% to US$104.34. GOPPAR shower even bigger fall – minus 11.5% to US$58.59.

Jeddah has become a hot summer destination within last years. Seasonal demand is now greatly geared up by Ramadan that falls to summer months. In July hotels in Jeddah saw a peak of demand from mostly domestic travellers. Several large events and a flow of religious travellers have boosted revenues of the city’s accommodations.


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