ME Hotels Least Affected by Recession

ABU DHABI — Hotels in the Middle East appear to be the least affected ones across the globe by the economic recession in the first half of the current year, indicates a latest study.

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Published: Sat 22 Aug 2009, 10:14 PM

Last updated: Sun 5 Apr 2015, 9:33 PM

Hotels in the Middle East did post a 17.5 per cent decline in revenue per available room, or revPAR, to $132, in the first six months of this year up to June 30. But this was significantly lower to the dip suffered by hotels in several other regions in the world, the study shows. Hotels in the Middle East could also register the highest global levels of 63 per cent both in terms of occupancy and average room rates in the period, though this was lower than the last year’s levels.

Interestingly, despite this year’s drop, Dubai has retained its double-digit revPAR growth for the fifth consecutive year, and has managed to grow its average room rates year-on-year despite the influx of supply entering the market every year. The emirate demands the second highest revPAR in the region after Abu Dhabi, and the fourth highest revPAR in the world. Abu Dhabi on the other side posted a revPAR growth of 6.9 per cent.

The study was conducted by industry consultants Deloitte relying on the data provided by the Smith Travel Research, considered to be the leader of global hotel benchmarking.

Beirut achieved the strongest revPAR growth, not only in the Middle East, but also worldwide, up a staggering 124.4 per cent to $117. “Increased political stability helped the city’s hoteliers increase occupancy by 72.1 per cent to reach 66.9 per cent, while average room rates grew 30.3 per cent to $175,” the study report said quoting Rob O’Hanlon, Tourism, Hotel and Leisure partner at Deloitte in the Middle East

Amman posted a revPAR growth of 3.2 per cent while Jeddah could achieve 20.4 per cent growth.

On the flip side, the Middle East cities Riyadh, Muscat, and Cairo reported declines in revPAR during the period.

Globally, hotels in almost all the regions reported a double-digit revPAR declines in excess of 15 per cent, on an average, in the period.

The worst-affected were the hotels in Europe, with revPAR falling 31.3pc to $75. However, in Euros negative growth was less severe, falling 20.8 per cent to €55. North America followed closely behind the Middle East, with revPAR falling 19.3 per cent.

The region achieved the lowest revPAR in the world at $54, driven almost equally by declines in occupancy and average room rates. “At the half-year stage, it is not surprising that hoteliers around the world are feeling the heat. This time last year, we could not have predicted that hotel performance would have been as severely affected as it has been. The global economic crisis has hit businesses and consumers hard in all corners of the globe and, as they tighten their travel budgets, the travel and tourism industry, in turn, has suffered. This has resulted in suppressed demand and more vacant hotel rooms around the world,” the study report said quoting Alex Kyriakidis, the head of the tourism, hospitality and leisure division of Deloitte Global.

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