STR reports mixed November for MEA hotels

Sharm El Sheikh Marriott Resort, Egypt. Photo credit: Marriott International (STR stated that occupancy grew 21.2 percent to 60.1 percent in Q1 while ADR reached LE 1,291.72 and RevPAR rose 35.5 percent to LE 775.69.)

Middle East hotels reported mixed November results, while hotels in Africa posted growth across the three key performance metrics, according to the latest data from STR.

In the Middle East, occupancy improved 0.9 percent to 69.8 percent year-over-year in November. At the same time, average daily rate (ADR) dropped 7.7 percent to $156.81, and revenue per available room (RevPAR) fell 6.9 percent to $109.42.

It was a brighter picture in Africa, where occupancy grew 5.8 percent to 68 percent, ADR jumped 7 percent to $119.59 and RevPAR increased 13.2 percent to $81.31. 

Tales from Two Cities

But not all cities in these two regions saw consistent growth or declines.  

In Dar es Salaam, Tanzania, hotel occupancy fell 16.7 percent to 53.2 percent, ADR dropped 1.8 percent to TZS251,655.28 and RevPAR declined 18.2 percent to TZS133,940.60.

STR analysts noted supply has grown 6 percent year-over-year for two consecutive months in Dar es Salaam. Prior to that jump, supply had remained nearly flat since early 2016. Despite the overall drop in occupancy, the market saw five nights with occupancy above 70 percent, due in part to the 21st AutoExpo in mid-month. 

According to the HVS Hotel Valuation Index, demand for hotels in the country's most populous city has been sluggish in the market due to a cut in government conferences and increased taxes. Additionally, direct flights to Zanzibar from neighboring countries may also be a factor for a decline in overnight leisure demand in neighboring Dar Es Salaam.

As noted earlier, Egypt's hospitality sector is on the rebound. In Sharm el-Sheikh, occupancy improved 23 percent to 62.8 percent year-over-year, while ADR increased 28.8 percent to EGP1,165.39 and RevPAR grew 58.4 percent to EGP731.65.

STR analysts point to a 23-percent November increase in demand (room nights sold) and a 22.6 percent increase in demand through the first 11 months of the year as further evidence of tourism recovery in the market. At the same time, a lack of supply growth has helped in hoteliers’ pricing confidence.