MENA hospitality markets witness softer revenue performance in H1 2017: EY
Source: EY , Author: Posted by BI-ME staff
Posted: Thu August 10, 2017 11:16 am

UAE. According to the EY Middle East Hotel Benchmark Survey Report, hospitality markets across MENA have so far witnessed a softer performance in the first half of 2017 when compared to the first half of 2016.

The majority of markets experienced a drop in revenue per average room (RevPAR) due to a slower global economy and an increase in supply in some of the markets like KSA and UAE, making the first six months a challenging time for the hospitality industry.

Hospitality markets in Cairo, Makkah, and Beirut witnessed the highest RevPAR growth in the region during the first half of this year when compared to the first half of 2016.

The Middle East Hotel Benchmark Survey Report, produced by EY, provides a monthly and year-to-date performance overview of leading hotels in the Middle East. The hotel set includes international branded and operated properties across the five-star and four-star segments.

Yousef Wahbah, MENA Head of Transaction Real Estate at EY says: “The hospitality market across continues to be affected by the drop in oil prices and challenging economic conditions, which has led to more conservative spending in the government and private sectors as well as among regional tourists. An increase in supply in some of the markets like KSA and UAE has also contributed to a drop in the performance.

"The summer months, which are typically seen as the low season in the majority of MENA hospitality markets, are expected to experience lower occupancy and room rates compared to the first half of the year. Starting September, we expect to see an increase in the hospitality market performance in some of the MENA cities due to the Hajj pilgrimage, global forums and regional events being hosted across the region, and regional trips taken during long weekends for upcoming holidays.”

Top MENA hospitality performers

Dubai recorded the highest RevPAR performance at US$209 within the MENA region. The Emirate has continued to focus on increasing tourism by means of meetings, incentives, conferences and exhibitions (MICE) events, leisure attractions, exhibitions and conferences, a diverse hospitality supply, and revised visa policies, which have all contributed to its current performance.

Cairo experienced an increase in occupancy of 4.7% points and an average daily rate (ADR) growth of 86.7%, resulting in a RevPAR growth of 101.7% in H1 2017 when compared to H1 2016. A stabilized political situation in the country and increased inbound international travel has contributed to the improvements in the performance of the market.

Kuwait city also saw an increase in occupancy by 5.2% points to 51.5% in H1 2017 compared to the previous year. While the ADR dropped by 4.7%, the city’s RevPAR increased by 6% in H1 2017 when compared to H1 2016.

Beirut witnessed an increase across all hotel performance indicators. An ADR and occupancy increase by 6.6% and 6.6% points respectively led to a 19.3% increase in RevPAR in H1 2017 when compared to H1 2016. Stabilized political conditions, enhanced security measures in the country, and an increase in inbound travel contributed to the improved performance.

Photo Caption: Yousef Wahbah, MENA Head of Transaction Real Estate at EY

About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

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For more information about our organization, please visit ey.com.

The MENA practice of EY has been operating in the region since 1923. For over 90 years, we have grown to over 6,000 people united across 20 offices and 15 countries, sharing the same values and an unwavering commitment to quality. As an organization, we continue to develop outstanding leaders who deliver exceptional services to our clients and who contribute to our communities. We are proud of our accomplishments over the years, reaffirming our position as the largest and most established professional services organization in the region.

 

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