The key areas in focus for the ME region.
Cairo
The Arab Spring caused a significant drop in both occupancy and ADR in Cairo and these were gradually catching up throughout the year. Hence, the excessive growth rate in REVPAR should be seen in this context whereby the base point is low and current REVPAR is still short from its pre-arab Spring position.
Dubai
Demand at Dubai Beach hotels always outstripped supply and is envisaged to hold this trend in the foreseeable future. Within a continuously growing market, there is an increasing demand to build more hotels, especially with Expo 2020. When it comes to city hotels, competition is growing, and more four and three-star properties are underway. The market share of these hotels is increasing and has been for the last three years. This category of lodging has proven to be resilient during downturns; something hotel owners only recently acknowledged as a worthwhile alternative to investment in five-star hotels.
KSA
The same trend of three and four star properties is also seen in Saudi Arabia. Sixty percent of domestic travelers happen to be land travelers in this country, and only 40 percent are air travelers. This highlights a great potential for budget hotels that could serve as stations during land journeys. These hotels are typically developed in the outskirts of a city where land prices are cheaper. The market in Riyadh has been fairly steady, much like Jeddah. The USD 80 billion budget cut the Kingdom is currently undertaking and the war in Yemen may affect the projects’ development pace.
Qatar
Doha was always an expensive destination relative to other cities in the GCC with high average daily rate (ADR) and low occupancy rates. Starting 2014, the market has witnessed an inversion of this trend. A new tourism strategy adopted by the Qatar Tourism Authority is aiming at attracting a bigger volume of tourists; growing the leisure segment, and trying to capture more non-gcc arrivals. The country is developing several tourism products throughout Qatar, such as eco-lodges and desert hotels, to diversify its tourism offering and spread tourism density away of Doha. This diversification strategy should allow transfer of travelers from transit to lay-over business.
Beirut
Beirut is still suffering from instability and market shakiness due to a political downturn. It is not very easy to predict the future for hospitality establishments in Beirut as the market is known for its high volatility, and really fast comeback whenever the situation calms down. Currently, the country’s ADRS are among the lowest in the MENA region. This could be an attraction to some tourists, but the prices are not reflected by the current hotel offerings in Downtown Beirut, which are more expensive. Nevertheless, there are positive prospects from the suburbs. These are not for generic hotels but some new types of lodging options including retirement homes, and guesthouses among others, developing outside Greater Beirut. While such initiatives would enrich the tourism experience, increase the length of stay and spend per tourist, they are not expected to become an alternative to Beirut but rather, a complement.