Friday, October 27, 2017

Hotel room rates and revenues in Saudi Arabia are likely to remain under pressure in the short-term as new supply continues to come to market, according to analysts.

Data from STR reveal declines in occupancy, average daily rates (ADR) and revenue per available room (RevPAR) across the Gulf kingdom during the third quarter of 2017.

Occupancy fell by 1.7 percent to 55.3 percent while ADR dropped by 8.4 percent to SR808.49 and revPAR slumped by 10 percent to SR446.98.

STR analysts said the country currently has more than 64,000 hotel rooms in the pipeline, and that should continue to affect performance levels in the short term as new properties come online.

The data showed that Saudi Arabia reported a 7.2 percent year-over-year increase in supply for the quarter, which countered a 5.4 percent uplift in demand (room nights sold).

Analysts also noted that group bookings (of 10 or more at one time) business was a significant driver of demand in August.

STR reported that the holy city of Madinah was the only city in the country to record Q3 RevPAR growth (up 2.4 percent), while Jeddah was the only market that recorded an increase in ADR (up 5 percent).

Hotels in the wider Middle East region reported negative performance results during Q3.

Occupancy fell by 2.8 percent to 60.9 percent while ADR dropped 8.1 percent to $145.50 and RevPAR declined by 10.7 percent to $88.61.

Source: http://www.arabianbusiness.com/industries/travel-hospitality/381964-saudi-hotel-rates-revenues-set-to-remain-under-pressure