Fattal Holdings, reported a triple-digit jump in revenues and a net profit of 107 million shekels in the second quarter. The largest Israeli hotel chain that owns 243 hotels in twenty countries, went through a bumpy ride during the corona period as virtually all travel came to a standstill. However, with restrictions being lifted, the business has experience a radical turn around. Quarterly revenues more than doubled (134% increase) since the corresponding period to NIS 1.5 billion. Most importantly, despite inflation, the occupancy rates in its hotels in the second quarter returned to pre-corona levels, posting record revenues and profits and raising the annual forecast. The average occupancy rate for the quarter was about 75% compared to an annual average of about 79% in 2019. In each of the areas of activity (Israel, Europe, Great Britain and Ireland and others) the occupancy rate was at a level similar to the annual average of 2019. The company explains that the average accommodation price per room increased according to inflation.
In addition, in July, already into the third quarter, the average occupancy rate reached 81.6%, the highest in the last two years. In terms of seasonality, the third quarter is considered a strong quarter in the tourism industry. Taking into consideration all the improvements, the revenue forecast for the year was raised from NIS 5.7-5.1 billion to NIS 5.8-5.3 billion.
The latest figures from the company report do not fully reflect the extent of the turnaround the business underwent. The price of Fattal shares has increased by 58% over the past year to reflect its NIS 6.6 billion value. During the pandemic the chain had to close its hotel rooms when it was ordered by the regulators to do so back in March 2020, which led to the occupancy rate of mere 2.3%. During that period the company implemented technical improvements that improved efficiency in certain areas and reduced labour and salary expenditures in other areas by several hundred thousand shekels per every quarter. The company’s stock has increased 436% since that time.