Hotel operators in the Middle East are focusing on driving incremental sales from their portfolios due to the challenging conditions of the market.
That is according to a report from global property consultancy Knight Frank entitled ‘Driving Hotel Value’.
“In order to bridge the gap between actual and budgeted returns, concerned stakeholders are turning to new ways of increasing the bottom line both by streamlining costs and creating new revenue streams,” said a spokesperson for Knight Frank.
The report highlights key initiatives that can impact hotel value.
“If many small changes are implemented to the way hotels operate, net revenue can be stimulated in a meaningful way,”said the spokesperson.
“The implications are clear as increasing net revenue leads to increased hotel value and as shown below, this can result in hotel values increasing by up to 22 percent with nominal capital investment.”
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The report states that potential uplift in hotel value can be achieved through a combination of initiatives aimed at both increasing revenues and decreasing expense:
- Rooms based initiatives can increase room revenue by over 10%
- F&B based initiatives can stimulate outlet revenue by over 10%
- Spa & recreation based initiatives can enhance net revenue by over 2%
- Energy based initiatives can create utilities expense savings of up to 20%