Jeddah hotel occupancy tumbles as room supply rises: STR

DUBAI: Jeddah’s hospitality sector recorded another tough month in December as occupancy levels and revenue rates fell anew amid a jump in available rooms during the month, preliminary data from industry monitor STR showed.

A fall in demand coupled with a rise in room supply led to the worst occupancy rates on record for the city — with average daily room rates also falling to their lowest in seven years.

For the month, STR reported that the hotel occupancy rate was down 8.4 percent to 45.1 percent while the average daily rate (ADR) was 4.1 percent lower to SR694.85.

A glut of hotel development across the region has put pressure on room rates as international chains seek to establish footholds from Saudi Arabia to Oman.

Revenue per available room, a performance metric used in the hotel industry derived by multiplying a hotel’s ADR by its occupancy rate, slipped 12.1 percent to SR313.45 in December.

“The absolute occupancy level would be the lowest for any December on record in Jeddah, while the ADR value would be the lowest for a December since 2010,” STR said.

Meanwhile, hotel room supply was up 7 percent while demand was 2 percent down.

JLL earlier said a potential 900 keys could enter Jeddah’s hospitality market over the last quarter with several properties nearing completion, which include the 445-room Hotel Galleria by Elaf.

More than 5 million visitors went to Jeddah in 2017, Saudi tourism officials said, and this number is expected to rise by 20 percent this year especially now that women aged 25 and over would now be allowed to visit the Kingdom alone.