Hotels in the Middle East and North Africa (MENA) region are likely to start to recover from the coronavirus slump in the last quarter of the year, according to a new report.

The recovery, to be led by the UAE and Saudi Arabia, will continue in 2021, and will be partly fuelled by efforts to boost the tourism industry, as well as by the launch of mega projects and local tourism demand, Colliers said in its latest analysis.

The global real estate services and investment management company said the UAE market will benefit from the build up to the World Expo, which is scheduled in the last quarter of 2021, while Saudi Arabia is already starting to welcome a limited number of pilgrims following months of tight restrictions.

“[UAE will] benefit from the build up to the Expo with the actual event expected to start in [the fourth quarter of] 2021. [In Saudi, the forecast] assumes restricted pilgrim access to Makkah and Madinah during Ramadan and Haj,” Colliers said in its report.

The travel and tourism sectors have been among the worst hit by the coronavirus pandemic. The lockdown in March left many hotels empty and decimated corporate revenues.

In the UAE, the World Expo, considered to be a catalyst for trade, tourism and investment, was moved to 2021, while in Saudi Arabia, international pilgrims have been banned.


It was only around May when restrictions started to ease and airlines gradually resumed passenger services. Worshippers have only just started converging in Saudi’s Mecca, but the kingdom have significantly scaled back the attendance to 10,000 local pilgrims, compared to the usual 2.5 million people that include international travellers.

Colliers said that once the expected recovery begins before the end of the year, the hospitality markets in MENA will continue to benefit “from the ongoing tourism initiatives, upcoming mega projects, as well as domestic tourism.”

“The forecast assumes faster recovery for the UAE and [Saudi Arabia] markets,” it said.

Full-year occupancy

Considering the impact of the pandemic, hotels in the UAE are expected to see occupancy rates decline by 29 percent to 50 percent this year compared to last year.

Among the worst-hit hotels will be the ones located in the Palm Jumeirah, where declines are expected to average 50 percent, followed by those located on Shaikh Zayed Road or Dubai International Financial Centre (DIFC) area, with a 47 percent occupancy rate decline.

Hotels in Dubai Creek and Festival City will also register a huge drop in performance, with an occupancy rate decline of 46 percent. Hotels in the Dubai Marina/ Jumeirah Beach Residence (JBR) area will register a 45 percent decline.


By 2021, occupancy levels in the UAE, particularly Dubai, should go up by as much as 69 percent compared to 2020.

The most in demand will be the hotels in Dubai Marina/ JBR neighbourhood, with rooms expected to be 69 percent booked on average next year, followed by Dubai Creek/Festival City hotels, with an average occupancy of 68 percent.

In Saudi Arabia, the occupancy rate should go up by as much as 71 percent, particularly those located in Makkah.

(Writing by Cleofe Maceda; editing by Seban Scaria) 

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