ZaraAnnual-English2015

MESSAGE TO OUR
SHAREHOLDERS
Esteemed Ladies and Gentlemen,
Welcome to Zara Investment Holding 22 nd annual meeting for the ordinary
general assembly of the shareholders.
In 2015, regional political instability coupled with
global economic volatility continued to weigh on the
tourism sector in Jordan impacting negatively our
company’s year-end results. In line with the national
tourism and economic indicators, we closed the
year with a drop in revenues triggered by a drop in
occupancy and average room rate.
Consolidated Operating Revenues of Zara dropped
in 2015 by 14.5% to JD 71.2 million compared with
JD 83.3 million in 2014. Profit from Operations
reached JD 17.6 million, a drop of 20% over 2014.
Consolidated Loss reached JD 1.6 million compared
with a profit of JD 1.4 million in 2014. The decrease
in revenues was triggered by a 12.5% decrease in the
overall occupancy, which reached a combined rate
of 49% for all of Zara hotels compared with 56% in
2014. Combined average room rate (ARR) dropped
by 2.6% from JD 114 in 2014 to JD 111. In assessing
2015 performance, we were reassured to see that the
drop in business of all of our hotels was in line with
the markets (regions) in which we operate.
The economy of Jordan continued its positive
trajectory in 2015, albeit much lower than expected.
GDP growth estimates were revised down from
3% to 2.3%, a drop of 23% over 2014. The tourism
sector, whose contribution accounts for 13% of GDP
as well as for 7% of gross value added (GVA), also
witnessed a drop during 2015. Contrary to UNWTO
2015 growth projections of 5% in international
tourists arrivals in the Middle East, arrivals in Jordan
dropped by 6%; tourism revenue dropped as well by
7% from JD 3.1 billion in 2014 to JD 2.9 billion. There
was an overall drop in package tours to Jordan by
31%, which drastically impacted our resorts given the
heavy reliance on this segment. Various other factors
impacted the decision of travelers to come to Jordan
in 2015. In addition, the weakening of the Russian
Ruble and the Euro against the US dollar to which the
Jordanian dinar is pegged rendered the destination
substantially more expensive.
In 2015, Zara continued to maintain its leading market
position and share of 5-star hotels and 5-star room
inventory in Jordan. We also maintained our market
leadership in the number of persons employed in the
hospitality sector. Employment in the 5-star hotels
segment in Jordan reached 8,434 persons in 2015
of which Zara employs approximately 26%; while
employment in the hospitality sector reached 48,960
in 2015 of which Zara employs approximately 4%. In
2015, we maintained our commitment to upholding
the highest standards in our operations underpinned
by the right culture, values, practices and behaviors.
Zara was the first hospitality private sector company
in Jordan to pledge and sign the UNWTO Global Code
of Ethics for Tourism, declaring its commitment to
OPERATING
REVENUES
IN MILLIONS
TOURISM
REVENUES
IN BILLIONS
2015
2014
2015
2014
JD 71.2
JD 83.3
JD 2.9
JD 3.1
EMPLOYMENT
IN 5-STAR
HOTELS
26%
ZARA
2,199
JORDAN
8,434
Annual Report 2015 9