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.