Al-Sharq Investment Projects earns less income from Holiday Inn Amman

AMMAN — Holiday Inn Amman generated lower profit during the first half of this year.

Al-Sharq Investment Projects, the Jordanian public shareholding company which owns the 5-star hotel, indicated in a disclosure to the Jordan Securities Commission that Holiday Inn Amman's operational earnings dropped by 31.2 per cent.

According to the disclosure, income during January-June 2015 amounted to JD2.5 million, down from JD3.6 million during the same period of last year.

After subtracting operational costs, gross profit stood at JD1.6 million at the end of June 2015 compared to JD2.6 million recorded at the end of June 2014.

Further deductions covering administrative, general and marketing expenses besides energy and maintenance costs and  taking into account other income, after-tax profit declined further to JD0.8 million from JD1.2 million.

The diminished mid-year performance followed a stable year which almost maintained the functioning level of 2013.  

Al-Sharq Chairman Ahmad Mufleh Horani told the shareholders in the 20th annual report covering the year 2014 that the hotel's occupancy rate slipped to 66.2 per cent, down from 69.1 per cent in 2013.

Noting that the average room rate per night edged up slightly to JD81.7 from JD81.5, he wrote in the foreword that the gross earnings of the hotel totalled JD6.9 million in 2014, almost unchanged from the previous year. 

The income statement as of December 31, 2014, showed after-tax profit at JD2.3 million, slightly more than the 2013 figure. 

In line with practice, shareholders voted to distribute cash dividends at a rate of 10 per cent, albeit less than the 12 per cent in 2013.

"Your company is one of the few hotel owners in Jordan that annually distribute reasonable dividends to shareholders," Horani said in the report.

The report singled Marriott, Kempinski and Meridien as the 5-star hotels in Jordan that compete with Holiday Inn Amman because they differ from other 5-star hotels in terms of number and type of rooms as well as the selling rate which averages between $120 and $130 per night.

"Based on the number of rooms of competitor hotels, the market share of Holiday Inn Amman stands at 28.5 per cent," the report said, estimating the fair market share at  25 per cent.

As required, the company disclosed that at the end of last year its workforce totalled 210 employees, three of whom worked at Al-Sharq and the remaining 207 at Holiday Inn Amman.

The disclosure showed that the chairman and Al Daman for Investments, out of 211 shareholders, owned 65 per cent and 26.1 per cent of the company's JD16 million capital.

Capital investment was put at JD16 million.

According to the balance sheet as of June 2015, total assets amounted to JD20.6 million, JD14.5 million of which were property, machines and equipment. JD0.9 million were financial assets at fair value.

Current assets totalled JD4.8 million, JD3.9 million of which were cash and quasi cash.