MENA Hotel Benchmark Survey Report

5 August 2018

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Commenting on the May 2018 MENA Hotel Benchmark Survey Report, Yousef Wahbah, MENA Real Estate, Hospitality and Construction Sector Leader at EY said:

“Overall, the majority of the internationally branded four and five star hotels in the Middle East hospitality market witnessed a decline across occupancy, average ro om rate (ADR) and RevPAR in May 2018 when compared to May 2017. In terms of KPIs, Abu Dhabi maintained the highest occupancy for the month of May with a 76.6% occupancy rate. Saudi Arabia was the top performer across the other metrics with Jeddah recording the highest ADR of US$351, resulting in the highest RevPAR of US$259 in May 2018.

Due to Ramadan beginning in mid-May this year and the onset of the summer season, the overall decline in performance in the region is unsurprising. Saudi Arabia, however, benefitted from the large influx of pilgrims during the holy month. Over two million pilgrims were expected to have visited the holy city, resulting in increased KPIs across Makkah, Madinah and Jeddah, with declines only in Riyadh.

Makkah saw an increase in occupancy by 7.3% points to 61.2% in May 2018 from 53.9% in May 2017. The city’s ADR increased by 41.3% from US$165 to US$233, which resulted in a growth in RevPAR by 60.4% from US$89 in May 2017 to US$143 in May 2018, both of which were the record highest increases across the region for the same period.

Madinah’s occupancy increased by 4.2% points from 63.8% in May 2017 to 68% in May 2018. It’s ADR increased by 11% from US$178 to US$198, resulting in an increase in RevPAR by 18.3% from US$114 in May 2017 to US$135 in May 2018.

Jeddah saw an increase in occupancy by 2.2% points to 73.7% in May 2018 from 71.5% in May 2017. The city also enjoyed a significant growth in ADR by 19.5%, up from US$294 in May 2017 to US$351 in May 2018. This led to an increase in RevPAR by 23.2%, up from US$210 in May of last year to US$259 in May of this year.

In the UAE, Abu Dhabi enjoyed the highest increase in occupancy percentage points within the region with 8.9% points, as well as the highest occupancy rate, which grew from 67.7% in May 2017 to 76.6% in May 2018. While the capital’s ADR decreased by 11.8% from US$101 in May 2017 to US$89 in May 2018, the city maintained its RevPAR of US$68 from last year.

Dubai’s hospitality market witnessed a dip across all KPIs as a result of the peak season of events and conferences coming to a close. Its occupancy declined by 16.4% points from 77.3% in May 2017 to 60.9% in May 2018. ADR dropped by 0.7% from US$238 to US$236, resulting in a decline in RevPAR by 21.7% from US$184 to US$144 for the same period.

The MENA hospitality market will continue to see a drop in KPIs during the summer season as business travel declines and conferences and events are at a minimum.”

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