Wednesday, November 29, 2017

ME hotels see occupancy drop in September

Hotels in the Middle East saw an overall decline in performance across occupancy and average room rate (ADR) parameters, resulting in a revenue per available room (RevPAR) performance drop across most of the international branded four and five star hotels during September, said an industry expert.

“Kuwait achieved the highest year-on-year increase in occupancy with 10.7 percentage points when compared to the same month last year,” added Yousef Wahbah, EY Mena Real Estate, Hospitality and Construction Sector leader.

“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,” he noted, commenting  on the September 2017 Mena Hotel Benchmark Survey Report from professional services firm EY.

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.

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 by12 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 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.

In parallel with Kuwait’s hospitality market witnessing the highest increase in occupancy in the Mena region, it also achieved a substantial increase in RevPAR. Occupancy reached 44.2 per cent in September 2017, an improvement from the 33.5 per cent recorded in September 2016. ADR faced a slight decrease by 3.3 per cent from $224 to $217; however, overall, the country saw an increase in RevPAR by 27.6 per cent in September 2017 when compared to same period last year. This can be attributed to the opening of new hotels and an increase in leisure and business travellers to the country.

In the Levant region, Beirut’s hospitality market witnessed an increase across all KPIs. Average occupancy increased by 2.6 per cent points to 74.1 per cent in September 2017 from 71.5 per cent in September 2016.

This was matched by an increase in ADR by 11.1 per cent from $150 in September 2016 to $166 in September 2017. This resulted in an overall RevPAR growth of 15.2 per cent from $107 to $123 over the same period last year.

Egypt also saw significant increases in its hospitality key performance indicators. The city witnessed an increase in average room rate, going from $49 in September 2016 to $83 in September of this year.

The jump led to Cairo’s increase in RevPAR by 77.7 per cent, from $36 in September 2016 to $64 in September 2017.This was the highest RevPAR year-on-year increase across the region in September.

“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 are historically the stronger performing months of the year, so we may see an improved performance in the sector when compared to previous months,” Wahbah concluded – TradeArabia News Service



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