Hotels in eastern Europe outperformed the rest of the Continent in the financial year to 31 March, with profitability rising…
Hotels in eastern Europe outperformed the rest of the Continent in the financial year to 31 March, with profitability rising 12.8% to €23,706 per available room, while Europe as a whole fared better than the Middle East, South Asia and Africa in a year of global political and economic turmoil, according to PKF`s Country Trends 2002.
The report provides detailed commentary and analysis on more than 1,200 hotels in 59 countries. Kuwait held on to its position at the top of the profitability table with IBFC (income before fixed charges) per available room of €39,283 while Italy achieved the highest rooms yield by a long stretch at €174.81, boosted by the highest average room rate of €256.16.
Europe recorded the only regional rise in average room rate, up 2.2% to €117.04, although this was outweighed by a 3.5% dip in occupancy to 68.2%, leaving rooms yield down only 1.3% at €79.85. This was less than might have been expected considering the boom of the previous millennium year and the impact of 11 September. Eight countries saw rooms yield improve and nine saw it decline. Russia was the star performer with rooms yield up 27.6% to €73.65, while Sweden had the largest fall in rooms yield, down 9.8% to €92.87.
Middle East hotels saw occupancy down 7.9% to 54.9% and average room rate slip 6.3% to US$101.96, cutting rooms yield by 13.7% to US$55.94. But the differences between the fortunes of individual countries were profound. Kuwait had the lowest occupancy in the survey (but the second highest average room rate) and occupancy dropped by almost a quarter in embattled Israel, while in Oman, UAE and particularly Bahrain, occupancy increased.
South Asia also saw rooms yield fall, with a 14.3% dip to US$32.53, due to a 5.8% decline in occupancy to 56.0% and a 9.0% drop in average room rate to US$58.10. India suffered the most with rooms yield down 19.8%.
Africa`s hotel industry was also hard hit with a 9.3% downturn in occupancy to 59.2% and a 10.1% dip in average room rate to US$70.81, forcing rooms yield down 18.4% to US$41.93. Northern Africa notched up the worst performance in the region and eastern Africa was the only subregion to see rooms yield up. Egypt saw both occupancy and average rate sink to leave rooms yield down 25.8% at US$38.43.
Melvin Gold, managing director of PKF`s hotel consultancy services said: The impact of the US economic downturn and the aftermath of 11 September has been compounded by ongoing political and economic uncertainty in a number of countries, hitting tourism and rendering the financial year to the end of March 2002 a very difficult and unusual one for hoteliers.
Europe showed an encouragingly small dip in rooms yield and has suffered less severely than the Middle East, Africa and South Asia. The situation remains highly uncertain. Overall the hotel sector is starting to recover, although it is taking longer than expected and it is inevitably patchy.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
