Middle East hotels mark rough September while Africa saw gains

Hilton has set plans to triple its footprint across the Middle East to include more than 120 hotels in the next few years. 
Riyadh, Saudi Arabia. Image: apriltan18 / Pixabay

Hotels in the Middle East reported September performance declines, while hotels in Africa posted growth across the three key performance metrics, according to the latest data from STR.

Overall, Middle East hotels faced an occupancy drop of 7 percent to 59.8 percent year-over-year, an 18-percent decline in average daily rate to $124.49 and a 23.7 percent decrease in RevPAR to $74.47. 

Africa, meanwhile, saw occupancy grow 3.9 percent to 65 percent, while ADR improved 6.4 percent to $107.96 and RevPAR grew 10.6 percent to $70.21. 

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In Beirut, Lebanon, occupancy fell 6.7 percent to 66.6 percent, ADR declined 6.8 percent to LBP224,065.02 and RevPAR dropped 13 percent to LBP149,146.78. STR attributed these declines to high performance levels in September 2017. Performance growth was well-pronounced during most of last year due to a stabilized political climate and a boost in tourism, analysts said. 

Despite the year-over-year performance decrease, Beirut’s absolute occupancy level was the second-highest for a September in the market over the past seven years. Only September 2017 (71.3 percent) was higher during that time. 

Riyadh, Saudi Arabia, meanwhile, reported occupancy growth of 26.7 percent to 56.3 percent, but ADR fell 8.7 percent to SAR599.84 year-over-year. Still, RevPAR grew 15.7 percent to SAR337.45 for the month

STR analysts attribute a 33.4-percent jump in demand (in terms of room nights sold) to several large-scale events hosted at the Riyadh International Convention & Exhibition Center, including the SFDA Annual Conference & Exhibition. 

The 56.3-percent absolute occupancy level was the highest for any September in the market since 2014. The highest occupancy night came on September 25 (78.5 percent), which was the first day of the SFDA Annual Conference & Exhibition. The decline in monthly ADR was likely due to continued significant supply growth (+5.8 percent year to date). 

Developers have taken note of Riyadh’s growth in hotel demand, and deals are in the works for the city. Earlier this month, Radisson Hospitality, part of Radisson Hotel Group, signed a deal to open the Radisson Blu Hotel, Riyadh Al Qurtuba, as well as the Radisson Hotel, Qurayat. As of June, the kingdom had a total of 209 hotel projects with 72,680 guestrooms in the pipeline, according to data from Lodging Econometrics.

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