Mideast hotels post 5.3% drop in occupancy in February

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Mideast hotels post 5.3% drop  in occupancy in February

Dubai saw a 3.5 per cent decrease in occupancy to 82.5 per cent as well as double-digit drops in ADR (-11.6 per cent to Dh833.78) and RevPAR (-14.7 per cent to Dh687.63).

by

Issac John

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Published: Thu 24 Mar 2016, 11:00 PM

Last updated: Sat 26 Mar 2016, 8:02 AM

Dubai: Hotels in the Middle East reported negative results in February, while hotels in Africa reported mostly positive results for the three key performance metrics when reported in dollar constant currency, according to STR.
The Middle East region reported a 5.3 per cent decrease in occupancy to 70.2 per cent compared with February 2015. Average daily rate for the month was down 10.5 per cent to $182.45. Revenue per available room dropped 15.2 per cent to $128.12.
Dubai saw a 3.5 per cent decrease in occupancy to 82.5 per cent as well as double-digit drops in ADR (-11.6 per cent to Dh833.78) and RevPAR (-14.7 per cent to Dh687.63). With significant supply growth outpacing demand, occupancy and ADR levels in Dubai have each been affected.
Qatar saw decreases across the three key performance metrics: occupancy (-16.4 per cent to 65.3 per cent), ADR (-9.5 per cent to QAR493.92) and RevPAR (-24.4 per cent to QAR322.72). The country's hotel performance has fluctuated due to supply growth at 4.7 per cent for total-year 2015 and 6.8 per cent for year-to-date 2016. STR analysts also cite a slowing in international arrivals due to a drop in oil prices and an increase in security concerns. 
Beirut reported a 1.9 per cent decrease in occupancy to 48.4 per cent, an 8.9 per cent drop in ADR to LBP203,858.09 and a 10.6 per cent decline in RevPAR to LBP98,605.75. According to STR analysts, Beirut hotels have struggled since September due to political unrest in the country and rising supply in the market..
Egypt reported decreases in occupancy (-8.6 per cent to 43.1 per cent) and RevPAR (-3.2 per cent to EGP263.16) but a rise in ADR (plus 5.9 per cent to EGP610.85). With the country's occupancy falling as a result of political and economic unrest, hoteliers have raised rates to maximize RevPAR. Egypt saw RevPAR grow 23.5 per cent in 2015, creating a high base for comparison. However, since the controversial plane crash in the Sinai Peninsula, demand has pointed downward.
Jordan saw healthy growth in occupancy (plus17.0 per cent to 46.3 per cent) and RevPAR ( plus 8.2 per cent to JOD43.81). ADR was down 7.5 per cent to JOD94.70. STR analysts believe that cheaper rates are positively affecting demand in Jordan, which increased 17.0 per cent in February to significantly outpace flat supply performance.
Johannesburg posted increases across the three key performance metrics: occupancy ( plus 5.1 per cent to 63.1 per cent), ADR (plus 7.9 per cent to ZAR914.28) and RevPAR ( plus 13.4 per cent to ZAR576.58).  
According to PwC's second Middle East hotel forecast report, growth fundamentals for the regions hotel industry remain strong, with solid performance in terms of ADR and occupancy levels, however, external factors present new challenges. The unexpected drop in oil prices and the weakening of the Euro are impacting tourist numbers, especially tourists from Russia.
In 2016. Muscat and Abu Dhabi are forecast to achieve good growth in both ADR and occupancy, driven by infrastructure spend, moderate supply increases, and the increase in tourist numbers that will result from Government promotional programmes. Doha is expected to see a return to positive ADR growth in both 2015 and 2016.
- issacjohn@khaleejtimes.com


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