MENA hospitality industry experienced a decrease in earnings in May 2017
Source: EY , Author: Posted by BI-ME staff
Posted: Wed June 28, 2017 1:03 pm

UAE. EY Middle East has just released the latest report of the "EY Middle East Hotel Benchmark Survey." The report covers occupancy and rate performance in key hotel markets across selected countries and cities in the Middle East on a monthly and year–to–date basis in local currencies and US dollars.
 
This monthly Middle East Hotel Benchmark Survey is part of EY's services to the hospitality sector.

Commenting on the May 2017 MENA Hotel Benchmark Survey Report, Yousef Wahbah, MENA Head of Transaction Real Estate at EY said: “The majority of the MENA hospitality industry experienced a decrease in earnings during May 2017 as both lower occupancies and lower average room rates reduced overall revenue per average room (RevPAR).

Abu Dhabi and Dubai maintained strong occupancy levels at 73.5% and 77.8% respectively but witnessed a decrease in RevPAR when compared to the same month last year. Dubai’s hospitality market saw a decline in RevPAR by 11.6% in May 2017, mainly due to the reduction in average daily room rate from USD 225 in May 2016 to USD 211 in May 2017.

Furthermore, Abu Dhabi’s hospitality market witnessed a drop in RevPAR by 20.3% from USD 92 in May 2017 to USD 73 in May 2016. The decrease was mainly due to the average room rate being lowered from USD 119 in May 2016 to USD 100 in May 2017, along with a decline in average occupancy by 3.8% when compared to May 2016.

In Saudi Arabia, Jeddah saw the highest occupancy rates for the region at 80.2% and the highest RevPAR at USD 247 in May 2017. Moreover, the hospitality markets in Madinah and Makkah experienced positive gains in RevPAR this month when compared to May 2016. Madinah’s hospitality market witnessed an increase in average occupancy of 6.1% in May 2017 when compared to the same period last year. Average daily room rates also increased from USD 179 in May 2016 to USD 180 in May 2017, resulting in an overall boost in RevPAR by 12.2% from USD 92 in May 2016 to USD 104 in May 2017.

In May 2017, Makkah’s hospitality market witnessed an increase in RevPAR of 90.5% when compared to the same period last year. The rise was mainly due to the average room rate increasing from USD 142 in May 2016 to USD 275 in May 2017. Makkah was able to maintain occupancy levels of 41% year-on-year. The increase in Madinah and Makkah’s hospitality market may be attributed to the beginning of the holy month of Ramadan where many worshippers prefer to perform Umrah and visit Madinah.

Elsewhere in the MENA region, Cairo’s hospitality market witnessed a decrease in occupancy by 10.1% from 74.4% in May 2016 to 64.3% in May 2017. However, it should be noted that the average room rate increased from USD 47 in May 2016 to USD 87 in May 2017, resulting in a rise in RevPAR by 61.9% when compared to the same time last year.

Jeddah, Makkah, and Madinah are expected to continue this strong trend due to the holy month of Ramadan. As Eid Al-Fitr is expected to fall on the 25th of June, it is anticipated that certain touristic destinations across MENA will experience strong performance during the last week of June.”

 

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