Ernst and Young publishes its Middle East Hotel Benchmark Survey for April 2013 | Ernst and Young publishes its Middle East Hotel Benchmark Survey for April 2013 -

Ernst and Young publishes its Middle East Hotel Benchmark Survey for April 2013

United Arab Emirates: Wednesday, July 03 - 2013 @ 13:06

An additional 500 branded rooms were introduced during Q1 2013, including Ocean View Hotel and the Ritz Carlton Jumeirah Beach extension, all within the 4 and 5-star hotel segment. Dubai’s hospitality market has absorbed this influx of new supply at an impressive rate and continues to perform exceptionally well. as underscored by a jump in average room rates from $292 to $314 and an increase of 2% percentage points (pp) in average occupancy over the same period last year. Consequently, Dubai’s hospitality market has experienced an overall year on year increase in revenue per available room (RevPAR) of 9.7% for Q1 2013, as compared to Q1 2012.

In terms of monthly performance, April 2013 saw no change in hotels in Dubai overall, with occupancy levels holding steady at 86% compared to April 2012, despite the notable increase in room supply witnessed over the last year. April’s average daily rates in Dubai, while nominally lower than March’s rates, still grew by 1% from $311 in April 2012 to $313. The slight month over month decrease from March to April is in line with the market’s typical seasonality, as tourism inflows begin to slow towards the hot summer months and Ramadan in July.

Of the hospitality markets surveyed in the MENA region, Hurghada, Egypt registered the strongest growth in RevPAR through Q1 2013, compared to last year. Q1 2013 reflected a positive period for both Hurghada and Sharm El Shaikh, as they both achieved RevPAR growth of 60% and 33%, respectively, over the same period last year. The Hurghada hotel market has continued its upward trend on last year’s performance with occupancy growing 11% pp year over year in April 2013, coupled with a substantial increase in average room rates of 46.1% for the same period.

The hospitality market in Kuwait City, Kuwait, witnessed an increase in both occupancy and average room rates during the month of April 2013 compared to previous year, due to a number of events and exhibitions drawing visitors to the city such as the Spring Shopping Festival 2013, EGYTIX 2013 and the Asian Hunting & Shooting Exhibition. Average occupancy rose from 56% in April 2012 to 67% in April 2013.

Manama, Bahrain saw an overall occupancy rate increase of 11.0% pp compared to April 2012, which is credited to the Formula One Grand Prix, which was hosted in Bahrain in April. The event attracted numerous tourists, media, and industry-focused individuals to the country.

During Q1 2013, average occupancy in Beirut fell to 56%, a decrease of 10% from Q1 2012, with average room rates decreasing by 23% for the same period. For the month of April, Beirut’s average room rates decreased approximately 22% over April last year, with RevPAR declining by approximately 23%.

In Egypt, Cairo’s hospitality market witnessed a downward trend in Q1 2013 compared to Q1 2012, with RevPAR dropping by 10%. Although average room rates increased by 5% through Q1 2013, the 5% decrease in average occupancy was the primary determinant in market’s slight year-on-year decline. Through April this year, Cairo hotels have continued to experience a declining trend, with a decrease in RevPAR of 36% year-on-year, mainly impacted by a drop in average occupancy of 20% over the same period.

In short, hospitality market performance across the MENA region has varied widely in April. Traditionally, the summer months are expected to bring fewer tourists to the region overall; however, we continue to expect that the region’s hospitality markets will demonstrate strong performance throughout 2013.

Commenting on the survey, Yousef Wahbah, MENA Head of Transaction Real Estate at Ernst & Young, said, “April is seen as one of the transitional months between the peak season and the low summer season. The region’s hospitality markets witnessed widely varied performance indicators, due to the unique political and socioeconomic conditions present in each country.”

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Wednesday, July 3- 2013 @ 13:06 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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