Hotels seek to cut expenses

September sees lowest occupancy rate this year

The number of tourists during the first nine months of the year totaled around one million, a drop of 14 percent compared to the corresponding period last year. According to figures released by the Ministry of Tourism, the month of September saw a 33 percent year-on-year decrease in tourist numbers, the sharpest drop so far this year.

Nada Sardouk, Director General of the MoT said that if the situation continues to deteriorate, tourism will be dealt an even harsher blow: “Even expatriates would eventually refrain from visiting their extended families here.”

The decline in the number of visitors has deeply impacted the hospitality sector, as reflected by low occupancy rates. The average occupancy during the first eight months of the year was 60 percent. Occupancy rates during September fell to 43 percent, a 40 percent drop y-o-y, according to international benchmarking firm STR Global. September also reported the biggest decline in revenue per available room with a RevPAR of $71, down by 56 percent y-o-y. The firm said that while RevPAR recorded double-digit growth in the first five months of the year, it dropped over the subsequent four months.

Recent media reports predicted the ultimate closure of renowned foreign-owned landmark hotels.

Pierre Achkar, president of the Syndicate of Hotel Owners said that the majority of prominent hotels have closed their largest suites. “No well-reputed hotel would declare its closure in similar circumstances because it might lose its customers.” It would cost a hotel several years to rebuild a solid client base.

Achkar said many establishments are undertaking systematical closures. “One can still make a room reservation at the Metropolitan for example, but instead of staying at the Metropolitan Palace hotel, he will get upgraded to the Habtoor Grand,” Achkar said. This technique will allow hotels to cut operational expenses, until the situation gets better.