Economic Trends

State of the region: How is the Middle East's hotel health?

25 Jan, 2012 By: Jena Tesse Fox

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Now that the Arab Spring is officially a year old, the Middle East has learned to cope with new realities and new challenges. And the region's hotel business seems to be adjusting rather well: A report from STR Global published on ArabianBusiness.com stated that demand for hotel rooms in the Middle East grew by nine percent in 2011, the highest growth rate in the world, and that the region reported both occupancy and average room rate improvements for the full-year.

Abu Dhabi reported the largest growth in occupancy, increasing 9.9 percent to 64.8 percent, followed by Dubai with a seven percent increase to 75.4 percent, STR Global's data showed.

Cairo, Egypt, was understandably the worst occupancy performer in the Middle East and Africa region, falling 44.9 percent to 36.1 percent, followed by Beirut with a 12.9 percent decrease to 56.2 percent.

Jeddah and Riyadh were the top regional performers in 2011 for average daily rates. Jeddah's ADR rose by 6.9 percent last year to $203.51 while Riyadh rose 6.6 percent to $271.67.

Dubai topped the regional chart for the largest RevPAR increase last year, jumping 10.7 percent to $168.64, the STR Global statistics showed.

Cairo's RevPAR fell the most in 2011, by 49.2 percent to just $42.71.

Overall in 2011, the Middle East and Africa region reported a 6.8 percent decrease in occupancy to 57.1 percent, a 5.3 percent increase in ADR to $162.81 and a 1.8 percent decrease in RevPAR to $92.99.

Hotel brands are taking note and stepping up their development in the region, including Hilton, which The National is reporting expects its business to grow in the Middle East this year. (The company does not issue specific figures for its forecasts.) And Accor is predicting a strong year of expansion in the Middle East for 2012, according to Hotelier Middle East, which quotes the brand's Middle East managing director Christophe Landais. Landais told the paper that the company is aiming to open 10 new hotels with a total of 2,800 rooms in the UAE and in Saudi Arabia. The 10 hotels will be positioned across all markets, from economy to luxury, and include brands such as Ibis, Novotel and Sofitel. This will grow the brand's total regional network to 65 hotels.

Just as no one could have predicted that 2011 would change the Middle East and Arab world so drastically, it will be hard to predict what 2012 will bring to the region. The investment from these major brands, however, indicate a strong sense of confidence in the market, and it seems safe to say that this year will see substantial economic growth and development throughout the area.

Topic : Middle East, Reports, Hotel Development
External Source : Arabian Business, The National, Hotelier Middle East