Banqueting demand helps boost Riyadh hotel profits

The Riyadh hotel market experienced mixed results during the month of July with a reduction in rate and occupancy impacting RevPAR levels, however food and beverage and banqueting demand boosted total revenue per available room (TRevPAR) by 7.2 percent. RevPAR performance was down 8.3 percent during the month driven by a 7.6 percent drop in ARR to US$214.91 and a 0.3 percentage point fall in occupancy to 38.3 percent. An increase in food and beverage and banquet revenues of 25.0 and 63.3 percent respectively, drove top-line revenue growth and when coupled with consistent operating expenses saw GOPPAR rise 10.8 percent to US$53.25.

“Although Riyadh hotels saw overall room revenue fall during July, a significant increase in banquet revenues driven by Iftar events, helped hotels record a 7.2 percent growth in top-line revenues. The holy month of Ramadan historically results in substantially lower levels of demand and July was no exception with the overall market achieving an average occupancy of 38.3 percent. Even though the hotel market was depressed during the month, year-to-date performance remains strong with occupancy levels up 6.6 percentage points to 63.8 percent” commented Goddard.