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April 30, 2014

MICE Activity Pushes Riyadh Hotel Occupancy




Riyadh hotels  have seen demand climbing during the first three months of the year, with occupancies increasing 6.3 percentage points over the same period last year, according to the latest HotStats survey of full-service, four and five star hotels by TRI Hospitality Consulting Middle East.

“Riyadh hoteliers enjoyed a boost in demand during March, which helped drive an increase in first quarter occupancy levels to 66.7 percent,” said Peter Goddard, managing director of TRI Hospitality Consulting. "The corporate and conference markets continue to provide hotels with a solid base of demand driven by government spending on key infrastructure projects in the capital including the Riyadh Metro. Average rates declined by 4.4 percent in March putting continued pressure on year-to-date figures, which fell 8.3 percent on the back of increased competition. Profit margins also remained under pressure as rising payroll expenses resulted in an 8.5 decline in GOPPAR.”

The market saw a 10.7 percentage point rise in occupancy levels in March reaching 72.5 percent, offsetting a 4.4 percent decline in average room rates to drive RevPAR up 12.1 percent to $185.40. While room revenue has been on the rise for the first quarter of the year, food and conferencing revenues recorded a decrease year-to-date. This saw food revenues incur the most substantial decline in non-room revenues of 22.1 percent to US$109.22 per let room during the month. The rise in direct expenses across all departments coupled with higher payroll costs left GOPPAR marginally lower than the previous year at US$147.92.


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