Profit Drops As Amman Hotels Struggle to Contain Costs

Despite recording a 1.0 per cent increase in total revenue this month, hotels in Amman suffered a 6.1 per cent decline in profit per room as costs continue to escalate.

Whilst hotels in the Jordanian capital successfully recorded a 3.0 per cent year-on-year increase in room occupancy, to 59.2 per cent, this was canceled out by a 6.3 per cent decline in achieved average room rate, as a result, Amman hotels recorded a 1.3 per cent year-on-year drop in RevPAR, to $86.60.

Despite the decline in Rooms Revenue, Amman hotels were buoyed by a 1.0 per cent increase in TrevPAR (Total Revenue per Available Room) to $142.09, fuelled by increases in non-rooms revenue, including Food and Beverage (+4.7 per cent) and Conference and Banqueting (+1.2 per cent) on a per available room basis.

However, costs are escalating, illustrated by the increase in both Payroll (+2.2 per cent) and Overheads (+6.5 per cent) this month and this situation is unlikely to improve in the short term as the government recently announced a tax increase on fuel prices as well as a number of commodities to combat its budget deficit.

As a result of increasing costs canceling out the growth in total revenue, profit levels at hotels in Amman fell by 6.1 per cent year-on-year in March, to $47.83 per available room.

This is result is based on the latest HOTSTATS research.