Hotel payrolls in Middle East much higher than in Europe right now

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The total payroll per available room for hotels in the Middle East is much higher than what is being seen in European properties right now. Middle East hotels had a LPAR (labour per available room) of US$35.77 in H1 2021 compared to Europe’s EUR19.43 ($23.01).

“Though the cost for labour may be cheaper, it’s only because there are less workers. On a PAR basis, housekeeping cost in the U.S. is down almost $6 in H1 2021 v. H1 2019, from $10.34 to $4.41. Meanwhile, a housekeeping shortage has meant that many hotels have done away with daily housekeeping unless requested, a move that hotel companies like Hilton have made standard in the U.S,” explained HotStats, the publisher of the figures.

Data carried by sister title Boutique Hotelier in April showed that the European hotel workforce has shrunk 43 percent YOY in March 2021. Boutique Hotelier reported that more than 350,000 exited the bruised European hotel sector last year.

Fewer workers in hotels, as HotStats said, means Europe has the lowest LPAR of any region for H1 2021. US was slightly ahead of the Middle East with a LAR of $36.56 and Asia reported $33.84.

Middle East hospitality has recovered quickly

Looking at other key metrics in hospitality, the Middle East continues to pull ahead of Europe, driven massively by the Middle East’s largely smoother handling of the pandemic.

Using hotel giant Accor’s recent H1 2021 as a barometer, RevPAR saw an overall decline of 60 percent in H1 2021 compared with H1 2019 and 58 percent lower in Q2 2021 versus Q2 2019. While all regions saw RevPARs drop against 2019 figures, the Middle East, Africa, Turkey and India region performed better than Europe and the Americas, beaten only by specific Asian markets.

RevPAR was down 44 percent in Q2 2021 for the IMEAT region. According to Accor, this performance was driven by Dubai which benefited from a recovery in leisure guests and largely eased border restrictions. Whether or not this regional improvement continues will depend on events expected to take place mainly in the second half of 2021, including Expo 2020.

You can access Accor’s results here.

Operating profits as of H1 2021

According to HotStats, For H1 2021 v. H1 2019, gross operating profit per available room (GOPPAR) broke down this way by region:

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