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Middle East Hotel Sector On the Up

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By - Monday 28 January 2013

Middle East Hotel Sector On the Up

The latest information from STR Global shows positive performances in the Middle East/Africa hotel sector across most regions when reported in US Dollars.

According to the report, 2012 saw a 6.1% increase in occupancy for the region to an average of 60.3% and a 5.6% increase in average revenue per available room (REVPAR) to $97.54. The increase is possibly partly because of a 0.5% decrease in the average daily rate (ADR).

In December 2012, the region reported a 3.7-percent increase in occupancy to 57.7 percent, a 1.1-percent increase in ADR to US$177.27 and a 4.9-percent rise in RevPAR to US$102.36.

"Looking at African performance in constant U.S. dollars, a difference in ADR performances between Northern Africa and the rest of Africa becomes evident; Northern Africa's ADR declined 2.1 percent in constant USD, whilst the remaining continent's ADR increased 2.6 percent in constant USD", said Elizabeth Randall Winkle, managing director of STR Global. "Northern Africa experienced a bounce back in occupancy with a 16.8-percent increase to 52 percent. Its African neighbours grew 3.9 percent to 59.6 percent occupancy.

"The Middle East had a good year achieving its third highest RevPAR of US$131.48 within the last eight years", Winkle continued. "The region remained popular with developers and guests growing 6.3 percent in room inventory and 10.2 percent in demand".

Highlights among the region's key markets for 2012 include (year-over-year comparisons, all currency in U.S. dollars):

  • Cairo, Egypt, jumped 24.5 percent in occupancy to 45.6 percent, reporting the largest increase in that metric, followed by Amman, Jordan (+15.1 percent to 65.0 percent), and Muscat, Oman (+14.3 percent to 59.6 percent)
  • Nairobi, Kenya, reported the largest occupancy decrease, falling 8.2 percent to 62.9 percent
  • Jeddah, Saudi Arabia (+9.0 percent to US$221.97), and Dubai, United Arab Emirates (+7.9 percent to US$234.99), ended the year with the largest ADR increases
  • Beirut, Lebanon, reported the only double-digit ADR decrease, falling 10.2 percent to US$186.62

Four markets achieved double-digit RevPAR growth:

Amman (+20.9 percent to US$99.39);

Jeddah (+19.7 percent to US$176.60);

Cairo (+13.7 percent to US$47.35);

and Dubai (+11.4 percent to US$181.45)

Beirut fell 17.3 percent in RevPAR to US$94.55, reporting the largest decrease in that metric.

Dubai is a country strongly on the recovery track right now, and its getting a mention in 2 of those top lists above is a sign that the hotel sector is now getting a big piece of that. Dubai has some of the most spectacular hotels in the world so its strong growth in ADR and RevPAR is entirely to be expected now that things are recovering. It is also nice to see Egypt possibly finding a path to recovery as well. Unfortunately Lebanon's Beirut appears to have taken a slip.

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