EY ME Hotel Benchmark Survey - August-September 2014

Commenting on the survey, Yousef Wahbah, MENA Head of Transaction Real Estate at EY said:

The MENA region’s hospitality industry has witnessed growth across the key performance indicators (KPI’s) across August and September2014, recovering quickly from the expected slowdown in the earlier summer months.

The UAE’s hospitality market witnessedagrowth in occupancy and ADR through August and September 2014. Compared to the same months last year Abu Dhabi’s hospitality market witnessed an increase in RevPAR of 4.0% and 6.8% during August and September respectively. This was contributed by an increase in occupancydue to conventions in the city over the respective months.

Dubai’s overall hospitality market recorded a drop in ADR in August and September 2014, compared to same months in 2013. The ADR dropped from US$213 in August 2013 to US$195 in August 2014. Average occupancy jumped month on month from July 2014 by 27.5 percentage points (pp), an increase due to the Dubai Summer Surprises Festival which commenced on 2 August 2014 and ended on 5 September 2014 compared to the event occurring in July in 2013.

September also recorded a drop in ADR in terms of Dubai’s overall hospitality market, from US$217 in September 2013 to US$201 in September 2014. However, average occupancy witnessed a slight increase of 2.2% pp during the same period last year.

In the wider MENA region, the hospitality markets in Doha, Beirut, Manama, Cairo and Madinaalso witnessed positive growth across August and September 2014, recovering from slight drops in the earlier summer months.

Doha’s hospitality market witnessed an increase in RevPAR of 37.5% and 27% during the month of August and September 2014 respectively compared to the same months last year. This was mainly due to an increase in average occupancy from 46% in August 2013 to 61% in August 2014,which was the result of GCC nationals arriving to Doha for the Eid Holiday.Across September 2014, occupancy in Doha rose by 15% pp from 59% in September 2013 to 74% in September 2014.

Beirut recorded an increase in average occupancy of 12.0% pp when compared to August 2013, which resulted in a jump in RevPAR from US$84 in August 2013 to US$104 in August 2014. The increase in Beirut’s hospitality market was primarily credited to the Lebanon Water Festival and Eid celebrations which attracted a significant number ofvisitorsfrom abroad. During the month of September, Beirut’s hospitality market performance witnessed an increase in RevPar of 61.9% when compared to the same period last year. This was mainly due to an increase in average occupancy from 35.0% in September 2013 to 56.0% in September 2014.

Hotels in Manama witnessed an increase in occupancy of 19.0% during the month of August 2014, when compared to the same period last year.In September 2014, the upward trend in occupancy continued, increasing by 8% pp compared to September 2013.
Hotels in Cairo recorded the most significant growth in average occupancy in the region, increasing from 14.0% in August 2013 to 52.0% in August 2014. The increase in occupancy was coupled with a jump in ADR from US$88 in August 2013 to US$109 in August 2014, resulting in a triple digit rise in RevPAR of 334.6% during the same period. Cairo’s hospitality market continued its positive trend into September, with average occupancy increasing from 17.0% in September 2013 to 42.0% in September 2014, which resulted to another triple digit rise in RevPAR from US$12 in September 2013 to US$42 in September 2014.

The overall hotel performance in Cairo has increased compared to last year due to anincreasingly stable political situation.

Madina witnessed very strong growth in August and September 2014, with occupancy increasing by 12% pp and 17% pp respectively. In September 2014, Madina recorded an increase in ADR from US$186 in September 2013 to US$258 in September 2014, resulting a rise in RevPAR of 79.4% duringthe same period. This was due to the fact that many Pilgrims arrive to the Kingdom of Saudi Arabia prior to performing Hajj and visitthe unique virtues of the city

The MENA region’s hospitality industry recovered rapidly in Augustand September and we expect this growth to continue through 2014 and intonext year. In the final months of the year, we expect further increases in overall occupancy rates, with the pleasant weather attracting more tourists, alongside the seasonal increase in events and conferences in the region.