Tuesday 28 September 2021

Middle East hotels post mixed performance in Q1

LONDON, April 23, 2018

Hotels in the Middle East reported mixed Q1 2018 performance results, while hotels in Africa posted growth across the three key performance metrics, according to data from STR - a leading market research firm.

Occupancy levels in the Middle East moved up 0.9 per cent to 70.6 per cent but average daily rate (ADR) declined 4.5 per cent to $163.76, forcing revenue per available room (RevPAR) to drop 3.7 per cent to $115.62.

In the UAE, occupancy rates were recorded at 83.4 per cent, up 1.1 per cent compared to the same period in 2017. ADR, however, was down 3.4 per cent to Dh666.48 ($181.4) while RevPAR slipped 2.3 per cent to Dh556.12 ($151.3).

Healthy demand growth (up 5.2 per cent) was enough to outpace continued significant supply growth (up 4.0 per cent) in the Emirates, leading to an increase in occupancy while mitigating the supply impact on rate levels. Key markets Abu Dhabi (RevPAR: down 4.0 per cent) and Dubai (RevPAR: down 2.6 per cent) each saw overall performance declines.

STR analysts note that the supply growth impact is more substantial in Dubai ahead of Expo 2020, while Abu Dhabi is looking to diversify away from its oil dependence and focus on more development in the tourism sector. 

Performance indicators in Egypt showed positive results with occupancy levels going up 21.2 per cent to 60.1 per cent in Q1, pushing ADR up 11.8 per cent to EGP1,291.72 ($72.8). Revenue per available room (RevPAR) also improved significantly, climbing 35.5 per cent to EGP775.69 ($43.7).

Performance recovery continued in Egypt, and the absolute occupancy level was the highest for a first quarter in the country since 2010. The year-over-year RevPAR increase was supported by both the Sharm El Sheikh (up 84.9 per cent) and Cairo/Giza (up 14.7 per cent) markets, and STR analysts expect this boost to continue as Russia recently resumed flights to Egypt after a two-year suspension.   

In Africa, occupancy rates climbed up 5.2 per cent to 58.9 per cent with ADR also jumping 6.6 per cent to $125.18. RevPAR was also up 12.1 per cent to $73.73.

In South Africa, occupancy was down 3.3 per cent to 63.1 per cent, but ADR moved up 2.6 per cent to ZAR1,361.30 ($112.2). RevPAR declined by 0.7 per cent to ZAR858.99 ($70.8).

STR analysts note that the slow start to the year for South Africa was in part due to supply growth (up 2.2 per cent). A recent analysis from STR showed that supply growth in the luxury segment is levelling off. At the market-level, Cape Town reported an 8.9 per cent Q1 decrease in occupancy. That decline was steeper in March specifically (down 12.3 per cent). STR analysts believe that the negative performance was influenced by the water crisis in the city. The announcement of “day zero” would have likely deterred international tourists, who would have had to book trips multiple months in advance. Johannesburg, on the other hand, saw a 2.5 per cent increase in occupancy for the quarter. That, coupled with a 5.1 per cent lift in ADR, pushed the market’s RevPAR growth to 7.8 per cent. - TradeArabia News Service

Tags: hotels | growth | RevPAR | MEA | Occupancy | Q1 | ADR |

More Travel, Tourism & Hospitality Stories

calendarCalendar of Events