Mena hotels register overall decline
dubai — The Middle East hospitality market witnessed an overall decline in performance across occupancy and average room rate (ADR) parameters, according to EY Mena Hotel Benchmark Survey Report.
This overall decline has resulted in a RevPAR (revenue per available room) performance drop across most of the international branded four and five star hotels during September 2017, the report said.
While Kuwait achieved the highest year-on-year increase in occupancy with 10.7 percentage points when compared to the same month last year, in the UAE, Dubai and Abu Dhabi’s hospitality markets witnessed slight decreases in RevPAR performance.
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.
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,
As the year draws to a close, the hospitality market is entering the stronger performing months of the year EY Mena Hotel Benchmark Survey Report 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 five per cent.
However, despite the slight drop in RevPAR, Dubai is on track to boost supply of hotel keys.
According to STR’s data for October, Dubai has 29,226 rooms in the pipeline across 95 hotels, accounting for 30.3 per cent of the existing supply of 96,340 keys.
Dubai Tourism figures showed that the number of hotel rooms in the emirate stood at 106,167 spread across 678 establishments in September 2017, an aggregated six per cent increase as compared to September-end 2016.
Luxury five-star hotels made up 33 per cent of the emirate’s total inventory, with four-star hotels commanding a 23 per cent share and properties in the one- to three-star categories a share of 21 per cent.
According to the EY report, 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 Makkah, 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 Makkah, 9.8 per cent in Riyadh and 23.3 per cent in Madinah. In regards to RevPAR, Jeddah experienced an increase of 4.6 per cent while Makkah decreased by 22.8 per cent and Madinah decreased by 15.5 per cent, though Riyadh’s RevPAR remained steady.
While occupancy rates are fluctuating throughout the Mena region, the average room rate in the majority of hospitality markets has declined, affecting the RevPAR performance across the four and five star hotel segment.
“Having said that, as the year draws to a close, the hospitality market is entering what historically are the stronger performing months of the year, so we may see an improved performance in the sector when compared to previous months,” said the EY report.
— issacjohn@khaleejtimes.com