- Dubai had the highest RevPAR (US$200) and highest occupancy (80%) in 2016 across MENA
- Cairo had the highest increase in RevPAR of 62.7% in 2016 compared to 2015 due to an increase in occupancy and room rates across MENA
- The highest ADR across MENA for 2016 was in Makkah, Saudi Arabia at an average daily rate of US$287
- Softer global and regional market sentiments also made 2016 a challenging year for the hospitality industry, which is expected to continue in 2017
Dubai, UAE - According to the EY Middle East Hotel Benchmark Survey Report, hospitality markets across MENA witnessed a negative performance in 2016 compared to 2015. The majority of markets experienced a drop in RevPAR due to a slower global economy, making 2016 a challenging year for the hospitality industry.
The United Arab Emirates’ hospitality market experienced a dip in RevPAR but still benefitted from strong occupancy figures among Abu Dhabi, Dubai, and Ras Al Khaimah with none of the cities falling below 70% in 2016. The decline in RevPAR was ascribed to supply outpacing demand of hotel rooms in the market, coupled with a drop in tourists traveling to Dubai due to the Euro and Russian Ruble decreasing in value and the strengthening of the US dollar. However, increased travel from Chinese tourists because of the change in the UAE visa policy helped improve the hospitality market in Dubai during the last three months of the year.
Abu Dhabi saw a decrease of 1% point in occupancy from 2015 with an average occupancy of 77% in 2016. The average room rate dropped by 15.1% from US$147 in 2015 to US$125 in 2016. The average rooms yield also experienced a decrease from US$116 in to US$97 in 2016, a 16.3% dip.
Dubai overall experienced no change in its occupancy between 2015 and 2016, remaining at 80%. However, the average room rate decreased by 7.7% from US$268 in 2015 to US$247 in 2016, rooms yield fell from US$216 in 2015 to US$200 in 2016.
Ras Al Khaimah saw a 7.2% points increase in occupancy rising from 64.8% in 2015 to 72.1% in 2016. Room rates saw a slight dip going from US$166 in 2015 to US$162 in 2016, a 2.4% decrease. Overall, Ras Al Khaimah’s hospitality sector improved in 2016 with an average rooms yield US$117 in 2016, an 8.8% increase from US$108 in 2015.
The Middle East Hotel Benchmark Survey Report, produced by EY, provides a monthly and year-to-date performance overview of leading hotels in the Middle East. The hotel set includes international branded and operated properties across the five-star and four-star segments.
Yousef Wahbah, MENA Head of Transaction Real Estate at EY says:
“The hospitality market was greatly affected by the drop in oil prices over 2015 and 2016 forcing many hotels to lower their room rates whilst also suffering from lower occupancy. However, some cities, such as Cairo and Ras Al Khaimah, managed to increase both occupancy and room rates for overall higher revenues per room.”
Top MENA hospitality performers
During 2016, the Dubai market registered the highest RevPAR of US$200, followed by Jeddah, which registered a RevPAR of US$196. Dubai also had the highest occupancy rate in 2016 at 80% while Ras Al Khaimah achieved the second highest occupancy at 72.1%. The highest room rates of 2016 were recorded in Saudi Arabia, with an average daily rate of US$287 in Makkah and Jeddah averaging at US$277. Cairo’s hospitality market experienced a growth across all KPIs in 2016, resulting in the highest increase in room yield compared to 2015 and a RevPAR of 62.7%, due to continued political stability in the country.
“The hospitality market across MENA in 2017 is expected to have a slow performance as the economy slowly adjusts to new trade agreements and currency fluctuations. It can be predicted that some markets may benefit from key annual events such as the Hajj pilgrimage, shopping festivals, and global forums, but the overall sentiment is that it will be another challenging year for the hotel industry,” concludes Yousef.
-Ends-
Karan Narsinghani
Junior Account Executive
T +971 4 445 42 22 ext 1252
M +971 55 950 8558
E knarsinghani@webershandwick.com
www.webershandwickmena.com
Weber Shandwick MENA, MCN Hive, 4th floor, Barsha Heights – Section C, Dubai, UAE
© Press Release 2017
