The Mena region’s hospitality industry records positive growth in 2013
Dubai’s hospitality market witnessed positive growth across all KPIs in 2013, when compared with 2012, according to the Middle East Hotel Benchmark Report by Ernst and Young (EY), which was released today (Monday, February 24).
Last year, approximately 2,780 hotel rooms, within the four- and five-star hotel segments, were added to Dubai’s hotel supply, which includes JA Ocean View Hotel, The Ritz-Carlton, The Oberoi, Sofitel Dubai Jumeirah, Anantara Dubai Palm Jumeriah Resort & Spa, Conrad Dubai, Mövenpick Hotels & Resorts and Novotel Dubai Al Barsha, among others.
The city’s hospitality market has also rapidly absorbed this influx of new supply and continues to perform exceptionally well, with a healthy occupancy rate of 80 per cent in 2013, when combined with an increase of 6.4 per cent in average daily rate (ADR) from 2012. The overall revenue per available room (RevPAR), meanwhile, reached $223 – an increase of 5.9 per cent from 2012.
Both Abu Dhabi and Al Ain also witnessed an improvement in RevPAR of 7.4 per cent and 13.5 per cent respectively in 2013, when compared with 2012.
In December 2013, Dubai recorded an increase in RevPAR of 3.4 per cent, when compared with the same period last year, with occupancy levels dropping marginally by 1.1 per cent, from 83.4 per cent in December 2012 to 82.3 per cent in December 2013.
The UAE’s stable occupancy rates and increases in RevPAR in December 2013 can be largely attributed to tourism, given the country’s mild winter weather. December has always been a peak month for tourism in the Emirates, attracting visitors from the region, as well as from around the world.
Manama witnessed a surge in RevPAR of 10.8 per cent in 2013, when compared with 2012. Average occupancy increased from 37 per cent in December 2012 to 42 per cent in December 2013. These increases can be attributed to the numerous conferences hosted in Manama last December, including the World Islamic Banking Conference from December 3 to 5.
Jeddah recorded a 9.3 per cent growth in RevPAR in 2013, when compared with 2012, mainly due to an increase in corporate demand, as well as the lack of supply of four- and five-star hotel rooms. In addition, the improvement in RevPAR can be credited to the number of conferences held in the city in December last year, including the Jeddah International Trade Fair (from December 15 to 18), the Linguistics in Arabia Conference (from December 3 to 4) and the 40th ICMM World Congress on Military Medicine (from December 7 to 12).
Kuwait City also witnessed an increase in RevPAR of 3.7 per cent in 2013, when compared with 2012. Although it does not seem significant, it should be noted that, based on EY’s research, approximately 753 new rooms (a mix of four- and five-star hotels) were added last year, most notably the Jumeirah Messilah Beach Hotel & Spa that commenced operations in Q2 2013, offering 408 new rooms. Kuwait City also hosted a number of events in December last year, contributing to the city’s increased RevPAR, of which the most notable was the 34th GCC Summit (from December 10 to 11).
Doha’s hospitality market, meanwhile, witnessed a decrease in RevPAR of 5.4 per cent in 2013, when compared with 2012, mainly due to a reduction in ADR, from $265 in 2012 to $252 in 2013. In December 2013, Doha’s ADR was $245, when compared with $301 in the same period in 2012, while average occupancy levels remained relatively consistent at 62 per cent. The drop in ADR reduced RevPAR from $190 to $153 over the same period.
In 2013, Cairo’s hospitality market registered the largest drop in RevPAR, when compared to 2012, out of all surveyed countries within the Mena region. It witnessed a fall in RevPAR of 41.2 per cent, due to the continued political uncertainty. Although there was no change in ADR between 2012 and 2013, average occupancy decreased from 38 per cent in 2012 to 22 per cent in 2013. In December last year, Cairo’s RevPAR decreased by 26.2 per cent, when compared with 2012, due to a drop in occupancy of five percentage points and a decrease in ADR from $89 in December 2012 to $80 in December 2013.
In 2013, average hotel occupancy in Beirut was 51 per cent, a decrease of three per cent from 2012, with average room rates declining from $201 to $169 over the same period, which resulted in a drop in RevPAR of 20.8 per cent. In December 2013, there was a minimal drop in RevPAR of 1.6 per cent, when compared with 2012.
Jordan’s hospitality market also witnessed a decline in KPIs, with RevPAR falling by 8.4 per cent, when compared with 2012, from $105 to $96, mainly due to a decrease in average occupancy of eight per cent over the same period. However, in December 2013, Jordan witnessed an increase in average occupancy of six per cent, when compared with December 2012, resulting in an increase in RevPAR of 10.2 per cent over the same period.
The year 2013 was a mixed year of performance for the hospitality market in the Mena region. The GCC region recorded positive growth, but markets in the Levant and North Africa saw a decline in performance, when compared with 2012. However, favourable winter weather conditions – when compared to other parts of the world – should continue to support the regional hospitality market through the first quarter of 2014.