Dubai, 29th April 2012 (WAM) -- While the Middle East hotel market has begun to stabilise since the political unrest in the first half of 2011, growth in the hospitality sectors among the different countries in the region will be mixed this year, according to speakers at the Arabian Hotel Investment Conference.
Elizabeth Randall, managing director of STR Global, said she is seeing 'very positive trends' in the Middle East hospitality sector since the Arab Spring, with revPAR (revenue per available room) up 10.4% across all hotels in the region in the first quarter. In particular, Dubai has strengthened its position as the regional leader in tourism, said Stewart Coggans, Executive VP Middle East & Africa for Jones Lang Lasalle Hotels. "Any market with double digit revPAR growth in 2011, with the new supply gains that Dubai has seen, is clearly a force to be reckoned with, and my personal view is that there will be another year of double digit revPAR growth in Dubai in 2012," he predicted. "So while most people say the supply pipeline of 12,000 rooms over the next few years is too much, I would argue that Dubai is well equipped to absorb that level of growth."However, speakers noted that markets such as Bahrain, Syria, and Tunisia are expected to continue to struggle. "In terms of the Mena region, (the Arab Spring) clearly had an effect in terms of Tunisia, and some of the projects in Libya and Egypt," said Rudi Jagersbacher, president Middle East and Africa for Hilton Worldwide. "And they no doubt set us back not only from a growth point of view but from a trading point of view. But having said all of that, if...we can get the existing properties completed that we signed before the issues we just experienced, I think we will have a very, very busy next couple of years." Alex Kyriakidis, president and managing director MEA for Marriott International, said 2011 was a 'great year' as the company added 3,500 rooms across the region. Marriott also plans to recruit more than 12,000 staff in the Middle East and Africa over the next five years, doubling the number of people employed by the company from its current 11,800 to more than 24,000 by the end of 2017. "We have 38 existing properties in 11 countries across seven lodging brands and a further 43 hotels under development which will more than double the number of hotels in the Middle East and Africa over the next five years," Kyriakidis said. "And we have a high degree of confidence about the pipeline converting to completed projects over the next three to five years."Transactions remain flatWhile many hotel companies are developing new projects in the region, the number of hotel assets changing hands in the region has remained flat, according to a study released at the conference by consulting firm Jones Lang LaSalle Hotels. The transaction volume of hotels in Europe, Middle East and Africa is expected to reach $11bn in 2012, which would be just slightly higher than the level reached in 2011. "Investments will be driven by debt restructuring deals as banks take a stronger stance on bringing hotels into receivership hotels into receivership positions with the region's economies facing increasing challenges," JLL said in its 2012 outlook for hotel investment. However, Chiheb ben Mahmoud, the head of hotel advisory at Jones Lang LaSalle Hotels, Middle East and Africa, was quick to point out that the opening of AHIC coincides with the announcement that Kerzner International Holdings had sold its 50% stake in Atlantis The Palm in Dubai to the hotel's co-owner Istithmar World for $250m. He also pointed out that Dubai-based Jebel Ali International Hotels recently bought a beach-front property in Dubai Marina's Jumeirah Beach Residence for more than $100m. "So it looks like transaction activity is picking up," he said. "It remains to be seen whether it will fuel a very active market, but things are happening."Copyright Emirates News Agency (WAM) 2012.
