Occupancy rate of furnished apartments drops to 20%
Furnished apartments in the Saudi capital are usually fully booked on normal days but since the advent of the holy month of Ramadan, their occupancy rates have dropped to 20 percent.
“Most of our guests stay with us from three days to a week. Others stay for a month. They usually come here for medical treatment but have now gone home for the Ramadan holidays,” said the manager of Al-Roken Al-Fakhir Furnished Suites in the Suleimania district.
He expressed the hope that occasional customers would occupy the vacant rooms because they need to generate revenues to meet financial obligations such as operating expenses and overhead costs.
“The owners are also concerned about the return on investments (ROI) which they promised their partners when they were convincing the latter to invest in the venture,” he told Arab News on Friday.
He said that since their guests come from as far as Skaka in the north, the Asir region in the south and Jubail in the east, the owners were prompted to put up the necessary amount for the apartment to cash in.
He added that the owners rake in profits the whole year except during Ramadan when their guests go home to join their families for the holidays.
“The guests prefer to stay in furnished apartments or villas because they pay only SR150 or SR200 a day, which is much cheaper than staying in a four-star or five-star hotel where they would be paying about SR1,000 or more daily,” he said.
He added that the low rates of the apartments allow the guests to stay for as long as they want.
“At present, we neither make any significant profit nor incur any substantial loss but we hope that there will be walk-in customers such as those coming from other parts of the Kingdom to spend a few days during the holidays,” he said.
He added that other furnished apartments incur losses nowadays because the revenues generated from room occupancy are insufficient to pay for operating expenses and overhead costs.
“For some, the overhead cost is not a problem because they pay small salaries. Their main worry is the maintenance costs such as paying electric bills,” he said.
The housing, and particularly furnished accommodation, sector in the Kingdom is a lucrative business in the major cities of the Kingdom bringing in good revenue from families and singles who wish to avail themselves of facilities such as the hospitals in the cities or for recreation during the holidays.