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Europe and the Middle East lead global hotel performance

Tourism in the Middle East is still growing faster than any other world region

Beirut achieved the fastest revPAR growth in the world last year

Major cities in Europe and the Middle East lead global hotel performance, taking seven spots each in the world's top 20 revenue per available room (revPAR) rankings, revealed in a report produced annually by Deloitte Touche Tohmatsu.

The global tourism industry saw a significant slowdown in most world regions in 2008, particularly in the final quarter, as the economic meltdown trickled through and impacted leisure and business travellers. Despite this slowdown, many cities across the world achieved strong hotel performance. Six cities secured places on all three top 20 ranking tables (occupancy, average room rate and revPAR) including New York, Abu Dhabi, London, Dubai and Paris.

According to the World Tourism Organisation, the first half of 2008 saw international tourist arrivals rise 5%. However, growth moved into negative territory in the second half of the year (down 1%), resulting in overall growth of 2% for the year. Despite growth being slower than the 7% achieved in 2007, an extra 16 million people travelled around the world and a new record was set of 924 million worldwide tourist arrivals.

Hotel performance was a tale of two halves. During the first half of 2008, most world regions had reported double-digit growth in US dollars as hoteliers seemed to be surviving the global economic crisis. However, from the summer onwards, consumer confidence dropped and tourism started to suffer. The final quarter of 2008 saw revPAR in many regions fall into negative territory. At year-end 2008, Central and South America and the Middle East were the only regions to turn double-digit revPAR growth, up 14.5% and 18.3% respectively, while Asia Pacific and Europe saw revPAR growth of less than 2% in US dollars. At the back of the pack was North America, with a 1.6% decline.

Commenting, Marvin Rust, Managing Partner for Hospitality in Deloitte said: "The global economy hit turbulent times in 2008, and as expected the tourism sector has been impacted by the economic slowdown around the world.

"In particular, financial market turmoil helped create a crisis in confidence in the final quarter of the year, with both individuals and corporations cutting back spending on travel and leisure. Looking ahead, however, the threat of deflation may become the greater concern, as the sharp slowdown in global economic activity has brought numerous commodity prices down from their lofty highs and business and consumer expectations shift to lower future prices of a wide range of consumables including hotel nights."

Europe stole the show with 10 spots out of the top 20 on the average room rate table and seven places in the revPAR top 20. Despite this strong showing on the ranking tables, hotel performance across Europe did slow as the economic crises worsened and ended the year in negative territory, down 5.1% to €70.

Looking ahead to 2009 Alex Kyriakidis, Deloitte Global Managing Partner of Tourism, Hospitality & Leisure who is based in the Middle East said: "The strategy for the tourism industry this year is one of survival. Hotels in particular will need to focus on providing value for money for customers and concentrating on what they do best. The hospitality basics will be key as hotels compete for room nights.

"It is important for countries to invest in tourism infrastructure developments, including airport expansions and hotel developments once credit becomes available again, as this is needed for the industries long-term growth and sustainability."

Top world cities ranked by revPAR 2008

City	revPAR	% change to 2007
Moscow	250	10.5%
Dubai	237	1.0%
Geneva	231	19.1%
Abu Dhabi	231	46.3%
New York	226	0.5%
Paris	208	10.2%
New Delhi	197	-1.3%
Doha	197	25.2%
London	183	20.3%
Muscat	176	31.1%
Riyadh	174	24.9%
Venice	174	-10.4%
Zurich	170	16.4%
Singapore	164	14.2%
Mumbai	164	-11.1%
Istanbul	159	23.5%
Manama	159	17.9%
Tokyo	154	14.2%
Hong Kong SAR	151	3.4%

Source: STR Global

Dubai
Dubai earned a place in all three top 20 tables and continued to achieve the highest average room rates and revPAR in the Middle East at US$300 and US$237 respectively. This performance gave it the second highest revPAR and third best average room rates in the world.

Abu Dhabi
Abu Dhabi had a fantastic 2008 with revPAR soaring by more than 46% to US$ 231. This earned the UAE capital fourth place on the revPAR ranking table, at US$ 6 behind Dubai. Occupancy was 81.5%, placing Abu Dhabi third in the world, and average room rates were up 34.9% to US$ 283. This meant the high-end destination now has the fourth most expensive rooms in the world, giving Abu Dhabi a crack at Dubai's revPAR title this year. Currently, there are not enough rooms to satisfy demand, so business is good for today's operators. However, there are several hotels in the pipeline, which will bring Abu Dhabi's stock to 23,000 by 2012. The local tourism authority then expects growth to stabilize.

Doha
Doha, the capital of Qatar, was eighth in the revPAR rankings, up 25% to US$ 197, and secured sixth place in the average room rate table. Over the next five years, Qatar is investing US$17 billion in tourism, according to the Qatar Tourism and Exhibition Authority (QTEA). Central to its plan is a goal to encourage 5% of transit passengers using Doha International Airport to stay in the city for for 48 hours longer than planned.

Oman
Oman continues to rival its gulf neighbours, and Muscat took 11th place in the average room rate rankings, up 35.3 % to US$ 257, while an increase of more than 31% in revPAR gave the capital city 10th position in the revPAR table.

Riyadh
Like many countries in the region, Saudi Arabia wants to reduce its dependency on oil and is keen to boost tourism, both domestic and international. International tourism is expanding rapidly and, according to UNWTO, the latest data shows a 54% rise in international tourist arrivals during the first quarter of 2008. Elaf Group , a subsidiary of Saudi Economic and Development Company , plans to drive tourism revenue up to US$ 19 billion by next year. A massive boost to religious tourism, with increases in the number of Hajj and Umrah pilgrims, is planned for the next three years. This will certainly help hotel business along the route in Medina, Mecca and Jeddah however; it was Riyadh that performed best last year. The royal capital and financial center of Saudi Arabia was 12th on the average room rate table and 11th on revPAR table, up 24.9 % to US$ 174.

Manama
In Bahrain, average room rates in Manama were up by more than 21% to US$ 223. This put the city 19th in the room rate league and 18th in the revPAR top 20. Bahrain is branding itself as a luxurious, yet family-oriented destination, and Muharraq Land, a US$ 50 million project in Manama was launched this year.

Beirut
Although Beirut did not make it to the top 20, the Lebanese capital did achieve the fastest revPAR growth in the world last year - up a staggering 102.2% to US$95. The city, a further illustration of how tourism is damaged by political conflicts, saw strong growth over the past year as it recovered from security clashes of 2006 and 2007.

All analysis in US$.

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About Deloitte:
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms, and their respective subsidiaries and affiliates. Deloitte Touche Tohmatsu is an organization of member firms around the world devoted to excellence in providing professional services and advice, focused on client service through a global strategy executed locally in over 140 countries. With access to the deep intellectual capital of approximately 165,000 people worldwide, Deloitte delivers services in four professional areas--audit, tax, consulting, and financial advisory services--and serves more than 80 percent of the world's largest companies, as well as large national enterprises, public institutions, locally important clients, and successful, fast-growing global growth companies. Services are not provided by the Deloitte Touche Tohmatsu Verein, and, for regulatory and other reasons, certain member firms do not provide services in all four professional areas.

About Deloitte & Touche (M.E.)
Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu (DTT) and is the longest established professional services firm with uninterrupted presence for over 80 years in the Middle East region. Deloitte & Touche (M.E.) is among the region's leading professional services firms, providing audit, tax, consulting, and financial advisory services through 25 offices in 14 countries with over 1,700 partners, directors and staff.

© Press Release 2009