Egyptian hotels have been the region’s hardest hit so far in 2020, with occupancy down at least 50 percent, despite the resumption of international flights and opening up of prime tourism spots.
Occupancy rates in Cairo were the hardest hit, down 67 percent for the first nine months of the year compared with 2019, followed by Hurghada, down 57 percent; Sharm El Sheikh, down 55 percent; and Alexandria, down 47 percent.
Colliers International’s MENA Hotels Quarterly Review showed the extent of the falls in hotel occupancy, with other cities including Makkah and Madina, Kuwait City and Manama and Muscat all seeing around a 50 percent year on year reduction in occupancy by the end of the third quarter.
In the UAE, Dubai saw the steepest declines, down 38 percent, while Abu Dhabi occupancy was down by 24 percent, and Sharjah and Ras Al Khaimah 28 percent. The emirate of Fujairah fared the best, with occupancy down by 14 percent.
The UAE saw its hotel occupancy fall less than other markets, despite more than 5,000 hotel rooms entering the market since September 2019.
“A total of 5,300 quality branded hospitality keys have entered the market between Q3 2019 and Q3 2020. 95 percent of this new supply opened in Dubai,” said the report.
“Most of these openings were in the first half of Q1 2020. Due to the outbreak of COVID-19, many hotel developments scheduled to open in 2020 have faced delays.”
The report also pointed out that demand for travel into Dubai has increased.
“Dubai recorded an occupancy of above 40 percent for the second consecutive month in September 2020 since the peak of pandemic,” it said.
In Saudi Arabia, some cities had showed resilience to the downward pressure caused by COVID-19.
Hotel occupancy fell by 10 percent year-on-year in Riyadh, and six percent in Dammam and Khobar, but Makkah and Madina both saw falls of 53 percent. “The Holy Cities of Makkah and Madinah have experienced low demand due to halt on pilgrim demand earlier in the year. Key markets with a more diverse mix of traveler have fared better,” Colliers noted in the report.
Combined supply in key markets was expected to have a compound annual growth rate of eight percent from 2020 to 2022, two percent lower than previously estimated, with COVID-19 having an influence on construction timelines, it said.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)
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