UAE, Saudi hotel sector set to bounce back; RAK bookings hit record

The northern emirate has seen demand from domestic market, with 71% occupancy, says Colliers International

Image used for illustrative purpose. A nice yellow hotel room with one bed.

Image used for illustrative purpose. A nice yellow hotel room with one bed.

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The UAE's and Saudi Arabia’s hotel sectors are expected to bounce back after COVID-19 faster than other regional markets, with the northern Emirate of Ras Al Khaimah seeing the highest demand in September 2020.

Colliers International said hotels in the UAE’s smaller markets have seen improved performance thanks to domestic demand and limited returning international travel, as the industry attempts to recover.

The real estate services company said hotels in the northern emirates of Ras Al Khaimah City and Sharjah as well as the eastern Emirate of Fujairah, have been experiencing higher levels of demand recovery in the third quarter.

Ras Al Khaimah City’s occupancy level in was 71 percent, while Sharjah and Fujairah both saw 45 percent occupancy. RAK City’s occupancy level will fall slightly in 2021 to 68 percent, but Sharjah’s and Fujairah’s will increase to 56 percent and 49 percent respectively, said a Colliers survey.

In Saudi Arabia, Khobar is achieving relatively higher occupancy levels in comparison to other key markets in the country, benefiting from the strong domestic demand - 50 percent in 2020, forecast to fall to 49 percent in 2021.

However, in Egypt, The Red Sea resorts have been severely impacted by the pandemic, with many hotels closed, resulting in a drop in performance levels, Colliers said. 

Hurghada occupancy levels have been as low as 29 percent in 2020, expected to rise to 48 percent in 2021.

Colliers’ MENA Hotel Market Survey September 2020 said its forecasts assume that the hospitality industry recovery will start in the fourth quarter of 2020, continuing into 2021.

The report said the forecast assumes faster recovery for the UAE and Saudi markets due to the build-up for Expo 2020, and that pilgrimage access will be granted for Saudi Arabia during Ramadan and Haj.

“Once the expected recovery begins in Q4 2020, the markets are expected to continue benefiting from the on-going tourism initiatives, upcoming mega projects as well as domestic tourism,” said the report.

The report shows that hotel occupancy has varied across the region in 2020, from as low as 24 percent in Beirut, down 50 percent from 2019, with RAK City seeing the highest occupancy.

It forecasts the occupancy will improve in 2021, up as much as 101 percent in Makkah, supported by access for pilgrims post-pandemic, while tourism hotspots such as Dubai’s Palm Jumeirah are expected to see a jump up to 67 percent occupancy, from a 39 percent in 2020. 

Colliers forecasts that Dubai Marina/JBR will see the highest occupancy in 2021 at 69 percent.

(Reporting by Imogen Lillywhite; editing by Seban Scaria)


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