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Arab Spring one year on: Hotel demand remains under pressure
Source: STR Global , Author: Posted by BI-ME staff
Posted: Fri February 10, 2012 2:31 pm

INTERNATIONAL. One year since the beginning of the Arab Spring, demand has yet to return to Egypt, Bahrain and the Levant region according to the 2011 year-end data from STR Global, the leading provider of market data to the hotel industry.

In Cairo, Egypt, where protests have been widely broadcasted, occupancy declined by 29.5 percentage points to 36.1 percent in 2011 and average daily rate (ADR) declined by 3.3 percent to EGP706.26.

In the usually popular leisure destinations of Sharm El Sheikh, Egypt, and Hurghada, Egypt, occupancy reached 48.1 percent (-38.6 percent) and 57.2 percent (-28.7 percent), respectively.

Unlike Cairo, ADR decreased more in Sharm El Sheikh (-17.3 percent) to EGP333.69 and Hurghada (-6.2 percent) to EGP329.15, as hoteliers tried to maintain demand volume by lowering rates.

In the Levant region, demand declined in the main cities such as Beirut, Lebanon (-12.2 percent), and Amman, Jordan (-6.8 percent). It resulted in a RevPAR drop by 22.2 percent in Beirut and 9.2 percent in Amman, despite that most of the unrest has been taking place in Syria and Egypt.

On the Arabian Peninsula, Manama, Bahrain, experienced the strongest demand decline across the region following the February political unrest in the country. As a result, occupancy and rate declined by 37.6 and 12.9 percent, respectively, year-to-December 2011, reporting 41.6 percent occupancy and BHD77.44 ADR.

Kuwait with limited new supply, saw a strong occupancy growth (+10.7 percent) in 2011. Robust demand growth helped to boost occupancy and ADR in Dubai, United Arab Emirates, and Riyadh, Saudi Arabia, reporting occupancy increases by 7.0 percent and 2.5 percent, respectively. ADR grew by 6.4 percent in Riyadh and 3.4 percent in Dubai.

New supply in Doha, Qatar (+13.0 percent) and matching demand growth at 13.0 percent led to flat occupancy levels (60.6 percent) and only a slight increase in ADR (+0.7 percent).

"A sense of insecurity across Northern Africa and Egypt has led leisure and business travellers to seek alternative destinations. As a result, hotels in the Arabian Peninsula saw demand increase by 13.2 percent", commented Elizabeth Randall, managing director at STR Global.

"Security in the region will be vital before expecting large numbers of tourists to return. The good news in the 2011 performance is that average rate across Northern Africa, Egypt and the Levant region has remained on par with the previous year (-0.5 percent in USD) and declining occupancy has started to show signs of stability in the second half of the year".


About STR Global:

STR Global provides clients-including hotel operators, developers, financiers, analysts and suppliers to the hotel industry-access to hotel research with regular and custom reports covering Europe, Middle East, Africa, Asia/Pacific and South America. STR Global provides a single source of global hotel data covering daily and monthly performance data, segmentation data, forecasts, annual profitability, pipeline and census information. 

Hotel operators can join the surveys on a complimentary basis and benefit from free industry data.  STR Global is part of the STR family of companies and is proudly associated with STR, RRC Associates, STR Analytics and HotelNewsNow.com.

For more information, please visit www.strglobal.com.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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