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| 11 January, 2018

Jeddah hotel room supply up, weighs on occupancy levels and room rates

The number of available rooms in Jeddah rose 7% in December, according to industry monitor STR

A Saudi woman checks out a room during the opening ceremony of Luthan Hotel, which caters exclusively to women, in Riyadh March 18, 2008. The hotel is the first of its kind in the Kingdom and the Gulf region.

A Saudi woman checks out a room during the opening ceremony of Luthan Hotel, which caters exclusively to women, in Riyadh March 18, 2008. The hotel is the first of its kind in the Kingdom and the Gulf region.

REUTERS/Fahad Shadeed
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.

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

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 although demand for the month, 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.

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