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Hotels throughout the Middle East & North African (MENA) region have shown modest signs ofrecovery towards the end of 2009, with occupancy rates improving. Key points:
- Room rates in the United Arab Emirates (UAE) fall to 2007 levels
- Two consecutive years of RevPAR decrease in Kingdom of Saudi Arabia (KSA)
- Gulf Cooperation Council (GCC) countries show mix-reactions in 2009
- Rest of MENA shows good signs
Middle East and North Africa, February 4th 2010: Hotel demand is showing modest signs of recoverythroughout the Middle East & North African (MENA) region, with December increasing by 4.6%.“This is a clear sign that hotels are entering the next stage of the cycle, and that slow recovery ison the way. At the moment, rates are reflecting the state of the economy, and in particular a dropin purchasing power. Once the economy picks-up, and hotel occupancy begins increasing,hoteliers will be able to slowly balance and then raise average rates, in turn boosting overallRevPAR results”, explains Director of Development, MKG Hospitality, Vanguelis Panayotis.Indeed, the last three months of 2009 reveal a continuation in heavy price cuts throughout the region,in an attempt to stimulate, or maintain demand.
According to MKG Hospitality’s online market intelligence tool, HotelCompSet, the UAE recorded a20.8% Revenue Per Available Room (RevPAR) decrease for year-end 2009, mainly driven by anAverage Daily Rate (ADR) drop of 15.2% - a major turnaround since 2008, when average room ratesincreased by 16.5% over 2007. Dubai recorded the largest RevPAR fall in 2009, with a decrease of27.5%, while Abu Dhabi proved to be a lot more resilient, dropping by only 4.9%.
“Abu Dhabi has been quite strong in the MICE sector over the last few years, as well as adopting amuch more consolidated approach towards developments. This has no doubt allowed the emirateto sustain healthier results (lower decline) during this difficult period,” continue Panayotis. “As theglobal economy improves, more likely towards the end of 2010 and into 2011, the UAE’s capitalshould see very good growth.”
Following a RevPAR decrease of 1.6% in 2008, KSA will end 2009 at -7.8%. The last three months of2009 reveal a further drop in ADR of 5.4% compared to the corresponding period in 2008, and a fall of2.4% for the entire year. Jeddah is the only city to record an average rate and occupancy increase forthe whole year, whilst Riyadh recorded a massive positive turnaround in December, helping the lastthree month to achieve a 13.5% RevPAR increase.
Other GCC countries, Bahrain, Oman and Qatar all experienced a double digit RevPAR drop in 2009, adramatic turnaround from the double digit growth the year prior. Kuwait is the exception, with 2008recording a RevPAR decrease of 3.4%, and then in 2009 dropping by only 1.6%. The last three monthshave also been positive for Kuwait (3% RevPAR growth), no doubt fuelled by an excellent last month ofthe year.
Although average rates are still falling, hotels throughout North Africa are reaching pricing pointsenough to motivate demand. Morocco, Tunisia, Algeria and Egypt, as well as Turkey and South Africaall reveal positive Occupance Rate (OR) signs over the last three months of 2009. Meanwhile in theLevant, Lebanon clearly recorded the best growth in 2009, and in fact of all countries in the region, asthe country moves closer to normal activity. Jordan also showed a small positive turnaround towards the end of the year.Finally, Turkey recorded a loss in revenue in 2009, as much as the country had gained the previousyear; RevPAR fell by 11.5% versus an increase of 11.2% in 2008.
For more than 25 years, MKG Hospitality has been a global leader in tourism, hotel andcatering consulting, with the largest database in the world (USA aside), representing allsegments from budget to upscale hotels. 45 000 hotels are compiled in MKG’s database(representing more than 2,5 million rooms).
MKG’s market monitoring database, HotelCompSet, contains a sample of over 250 brands in150 countries (representing more than 800 markets) and 11,000 corporate chain hotels,representing more than one million rooms. HotelCompSet provides daily, monthly andyearly monitoring of hotel indicators and analyses of its sample
MKG statistical samples accuracy strengthen our expertise in the hospitality industry.Together with other specialised brands, MKG Qualiting, OlaKala, Worldwide HospitalityAwards, Global Lodging Forum, as well as sector publications HTR Magazine and HotelRestau Hedbo, MKG Group supports investors, hoteliers and key tourism players to improveperformance, boost productivity and achieve results.
Established in 1985 by Georges Panayotis, MKG Group has built a solid reputation forbusiness expertise and substantial European-based know-how in the fields of tourism, lodgingand food service. MKG Group meets the needs of each of its clients by providing valuableanalytical and decision-making skills necessary for success.
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