Middle East hotels top performers in first quarter

(KHAMEIS AL HEFAITY)

 

Hotels in the Middle East were the top performers in the world during the first quarter of 2008. Analysis by business advisory firm Deloitte showed the region now has the highest average room rates at $181 (Dh644), overtaking Europe for the number one spot.

The Middle East also achieved the highest occupancy in the world at 74.3 per cent – which resulted in revenue per available room (revPAR) of $134.2, up 19.4 per cent on the same period last year.

Alex Kyriakidis, Global Managing Partner of Tourism, Hospitality & Leisure at Deloitte, said: "Middle Eastern governments are committed to long-term strategies to move away from reliance on oil and associated revenues and are investing substantially in tourism products and services that will appeal to different market segments, including the corporate sector.

"While some markets, which have experienced amazing performance over the past few years, are now slowing down, even at this less frenetic pace they are still achieving results which will make hoteliers in other parts of the world envious."

Rob O'Hanlon, Tourism, Hospitality and Leisure Partner for Deloitte Middle East, said: "With the strongest occupancy and average room rates in the world, hotel performance in the Middle East is off to a very good start in 2008.

"If the rest of 2008 follows the pattern already set for the first quarter, hoteliers in the region could enjoy a remarkable five-year run of double-digit growth."

So far in 2008, the hotel industry in the Middle East has been characterised by two distinct markets. The first has shown strong absolute revPAR, growth in average room rates and often a decrease in occupancy due to the influx of new supply. Examples of this market include Dubai and Doha.

The second type of market in the Middle East is achieving a much lower absolute revPAR but is experiencing exceptional revPAR growth driven by increases in both occupancy and average room rates. Amman and destinations in Egypt are examples of this type of market.

DUBAI

Healthy double-digit revPAR growth continues in Dubai albeit at a slower pace than last year, said Deloitte. This year is off to a good start with revPAR at $315, the strongest revPAR in the Middle East. Even though occupancy was down 1.2 per cent, both occupancy and average room rates are impressive in absolute terms at 88.6 per cent and $356 respectively.

ABU DHABI

RevPAR growth in Abu Dhabi increased 24.4 per cent to $252 during the first quarter, with occupancy increasing to 86.7 per cent. Average room rates fuelled this growth up 17 per cent to $291, the second highest average room rates in the region after Dubai. After a 31 per cent jump in passenger traffic at Abu Dhabi International Airport in 2007 and a long list of attractions being developed, including the new Formula 1 Etihad Airways Abu Dhabi Grand Prix in 2009, the emirate's success is likely to continue.

According to the Abu Dhabi Tourism Authority, 20,000 additional hotel rooms will be needed to meet the emirate's projected tourist traffic of 3.5 million. According to Lodging Econometrics there are 64 hotels or 19,482 rooms currently in the pipeline.

DOHA 

During the first quarter of this year, Doha saw a slight increase in revPAR, according to Deloitte.

Several new hotel openings in Doha have increased the supply of rooms in the market making it more difficult for hotels to achieve high occupancy levels.

According to Lodging Econometrics, 31 hotels or 9,770 rooms are currently in the pipeline for Doha, which makes attracting tourists very important if this supply is to be absorbed. 

EGYPT

Egypt is becoming more popular with tourists due to the current low price of luxury status accommodation. Taba came out on top during the first quarter of 2008 in terms of revPAR growth, achieving a staggering 107.7 per cent increase.

Occupancy grew from 43.1 per cent to 68.1 per cent suggesting terrorist attacks in 2004 are no longer overshadowing the decision to spend time in Taba. However, when looking at absolute revPAR, the destination is the lowest in the Middle East at $25. Following the same trend are cities such as Alexandria and Luxor achieving revPAR of $57 and $48 respectively.

AMMAN

During the first quarter of 2008, hotels continued to perform well in Amman as occupancy increased 20.7 per cent to 64.5 per cent. Average room rates increased 13.6 per cent to $129.

The government's National Tourism Strategy 2004-2010 has set goals to increase tourism receipts to $1.84 billion and doubling tourist arrivals to 12 million by 2010. At the half way mark, Jordan has already achieved its tourism receipts target, surpassing it three years early. According to Jordan's Central Bank, tourism revenues increased to $2.11bn during the first 11 months of 2007.

BEIRUT

Hotel performance in Beirut achieved a 20.5 per cent increase in revPAR, said Deloitte. With a low occupancy of 36.8 per cent and average rates of just $115.

 

The number

74.3% was the average rate of occupancy in Middle East hotels – the highest in the world. This resulted in a revenue per available room of $134.2.

 

Comments

Comments