MENA hospitality market performance declines

The Middle East hospitality market witnessed an overall decline in performance across occupancy and average room rate (ADR) parameters, resulting in a RevPAR performance drop across most of the international branded four and five star hotels during September 2017, according to EY’s September 2017 MENA Hotel Benchmark Survey Report.

Kuwait achieved the highest year-on-year increase in occupancy with 10.7 percentage points when compared to the same month last year. Furthermore, Cairo witnessed an increase of 69.4 per cent in ADR and 77.7 per cent in RevPAR during September 2017 when compared to September 2016.

In the UAE, Dubai and Abu Dhabi’s hospitality markets witnessed slight decreases in RevPAR performance in September 2017.

Looking at Dubai specifically, the hospitality market experienced a decrease in RevPAR by 18.4 per cent from $153 in September 2016 to $125 in September 2017. The decrease was primarily due to the ADR dropping by 12 per cent and a decrease in occupancy by 5.8 per cent points. A shorter than predicted public holiday for Eid Al Adha, resulting in lower demand, may have attributed to the performance drop, said Yousef Wahbah, EY MENA Real Estate, Hospitality and Construction Sector Leader.

In Abu Dhabi, the hospitality market witnessed an increase in occupancy of 5.9 per cent points from 74.7 per cent in September 2016 to 80.5 per cent in September 2017. However, the ADR dropped by 12 per cent from $106 to $94 compared to the same time last year, resulting in an overall drop in RevPAR by 5 per cent.

Saudi Arabia witnessed an overall increase in occupancy in its major cities when compared to the previous year. Occupancy increased by 4.9 per cent in Jeddah, 6.8 per cent in Mecca, 4.5 per cent in Riyadh, and 6.7 per cent in Madinah. However, ADR decreased by 1.8 per cent in Jeddah, 31.2 per cent in Mecca, 9.8 per cent in Riyadh and 23.3 per cent in Madinah.