Revenue per available room of Jeddah hotels in November lowest in a decade

Above, the Jeddah Hilton hotel. STR said Jeddah hotels’ RevPAR was pegged at SR321.06 in November, 25.4 percent lower from a year ago. (Courtesy Jeddah Hilton)
Updated 13 December 2017
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Revenue per available room of Jeddah hotels in November lowest in a decade

DUBAI: The revenue per available room (RevPAR) of Jeddah hotels last month was the lowest for a November since 2007, industry monitor STR said in its preliminary report yesterday.
RevPAR, arguably the most important of all ratios used in the hotel industry, is derived by multiplying a hotel’s average daily room rate (ADR) by its occupancy rate. The performance metric provides a snapshot of a hotel’s business performance by incorporating room rates and occupancy levels.
STR said Jeddah hotels’ RevPAR was pegged at SR321.06 in November, 25.4 percent lower from a year ago and 26.9 percent lower from SR439.60 a month earlier.
“Preliminary November 2017 data for hotels in Jeddah, Saudi Arabia, indicate significant supply growth and steep performance declines,” STR said.
Among other industry indicators, the occupancy rates in Jeddah hotels was 17.4 percent lower to 45.7 percent while average daily rate during the month was down 9.7 percent year-on-year to SR702.62.
Hotel room supply was up 9.8 percent in November, but demand went down 9.3 percent, STR noted.
The property consultancy JLL in its previous report said that a potential 900 keys could be available by the end of this year with some hotel projects scheduled to be completed, including the 445-room Hotel Galleria By Elaf.
“Over the next two years, a number of midscale hotels are also expected to open under the Ibis and Premier Inn brands,” JLL said.
“The diversification of the hotel market will make Jeddah a more attracted place to visit to broader range of visitors.
The Saudi government recently launched a multi-billion project that aims to develop 34,000 square kilometers of the Red Sea coastline and 50 reef-fringed islands into luxury resorts and luxury residences.
Construction is scheduled to begin in 2019, with the first phase of the project set to be completed by 2022.


Potential SABIC deal would affect Saudi Aramco IPO time frame, says CEO Nasser

Updated 20 July 2018
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Potential SABIC deal would affect Saudi Aramco IPO time frame, says CEO Nasser

JEDDAH: A potential deal to buy a stake in petrochemical maker SABIC would affect the time frame of Saudi Aramco's initial public offering (IPO), the oil firm's president and CEO Amin H. Nasser said Friday. 

The IPO of around 5 percent of Aramco, which was initially to take place this year but is now more likely to happen later, would be the world's biggest listing, raising up to $100 billion.

Nasser said that buying a stake in a chemical company like SABIC would positively affect Aramco's revenue, Al Arabiya reported.

“We are still in the very early stages of the discussion to buy a stake in SABIC,” the Aramco CEO said.

“Aramco is ready for the initial offer and the timing remains subject to the state's decision.”

Saudi Aramco said on Thursday it is looking at the possibility of buying a stake in SABIC, a move that could boost the state oil giant’s market valuation ahead of the planned IPO.
Aramco said in a statement that it was in “very early-stage discussions” with the Kingdom’s Public Investment Fund (PIF) to acquire the stake in SABIC via a private transaction. It has no plans to acquire any publicly held shares, it said.
In a separate statement, PIF also said talks about a sale were in early stages. “There is a possibility that no agreement will be reached in relation to this potential transaction,” it said.