Aranca MENA Tourism and Hospitality Report April 2014

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Transcript of Aranca MENA Tourism and Hospitality Report April 2014

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    MENA Tourism and

    Hospitality Report

    Theme: Wellness/Medical Tourism

    April 2014

    aranca.com

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    Table Table of Contents

    01. MENA Tourism Synopsis .............................................................................................. 102. Hospitality Market Update ........................................................................................ 203. UAE Tourism Industry................................................................................................... 404.Theme: Wellness/Medical Tourism ........................................................................... 605. Hotel Pipeline and Expansions ................................................................................. 806.Trends in Hospitality and Tourism in GCC.............................................................. 10

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    MENA Tourism and Hospitality Report April 2014 1

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    01MENA Tourism SynopsisTourism in MENA is on a growth path, driven by the governments active efforts to

    develop the sector and several events scheduled for the year

    MENA TOURISM & HOSPITALITYAccording to the United Nations World Tourism Organization (UNWTO), the Middle East

    witnessed mixed growth, receiving 52 million visitors in 2013. The World Travel & Tourism Council

    (WTCC) anticipates travel and tourisms direct contribution to GDP in the MENA region to grow

    5.5% in 2014. Furthermore, the council forecasts Oman to register one of the strongest growth

    rates in the travel and tourism sector globally and support the sectors growth in MENA. In

    February 2014, tourist arrivals in Egypt declined 27% y-o-y; the c ountry received the most tourists

    from Eastern Europe, Western Europe, and the Middle East.

    In February 2014, key hospitality sec tor indicators in the MENA region improved: occupancy

    rates rose 1.3 percentage points (pps) y-o-y to 67.4%, the average daily rate (ADR) increased

    2.7% y-o-y to $177.4, and revenue per available room (RevPAR) expanded 4.0% y-o-y to $119.6.

    Oc cupancy rates in Manama (Bahrain), Doha (Qatar), and Amman (Jordan) grew 10%, eac h,in the same month. ADR increased the most in Dubai (the UAE), rising 9.7% to $286.9 as several

    events were held during the month, allowing hotels to demand higher prices. Conversely, Abu

    Dhabi (the UAE) rec orded the largest decline in ADR, which fell 22.9% to $148.7, largely due to

    the higher base in February 2013. Manama (Bahrain) and Amman (J ordan) reported the

    highest growth in RevPAR in February 2014 owing to increased occupancy rates. RevPAR

    decreased the most in Beirut (Lebanon), declining 31.4% to $55.6, primarily due to lower

    occupancy rate.

    Egypt and J ordan increased visa fees despite low tourist arrivals due to political unrest in the

    region. J ordan raised its visa fee from J OD20 to J OD40 effective from April 2014, whereas Egypt

    plans to hike the visa fee from $15 to $20, with effect from May 2014. This is expected to impact

    smaller groups of tourists and independent travelers, thereby hampering the overall tourism

    sector.

    In 2014, Qatar launched Qatar National Tourism Sec tor Strategy 2030 with the a im of

    promoting itself as a world class hub with deep cultural roots. The country targets increasing

    tourisms contribution to G DP to 5.1% by 2030 from 2.6% currently. The government and the

    private sec tor plan to invest about $4045 billion in total in the tourism sec tor by 2030.

    Oman plans to conduct several road shows ac ross GCC in 2014. These events would entail

    meetings and presentations to create awareness about Omans travel offerings and promote

    Oman as a short-break tourism destination.

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    02Hospitality Market Update12The hotel industry in the Middle East & Africa (MEA) region performed well in

    February 2014. Occupancy rates increased 0.9 pps y-o-y to 67.4% and ADR grew 2.7%

    y-o-y to $177.42, resulting in a 4% y-o-y rise in RevPAR to $119.55

    OCCUPANCY RATE

    Manama (Bahrain) reported the highest increase in occupancy levels at 17.7 pps y-o-y to

    63.2% in February 2014, whereas oc cupancy rose in Amman (J ordan) as well (5.5 pps y-o-y to

    59.3%) in February 2014.

    Doha (Qatar)s oc cupancy rates improved 9.4 pps y-o-y to reach 76.9% in February 2014. The

    government aims to attract seven million visitors to Qatar by 2030 and is working toward this in

    collaboration with the private sector. The government plans to invest $4045 billion in

    developing Qatars tourism sec tor. Furthermore, the country has about 60 new tourism

    development initiatives in the pipeline.

    Occupancy rates in Abu Dhabi (the UAE) increased 3.1 pps y-o-y to 81.0% in February 2014 asthe number of guests rose 33% to 262,193 during the month. Growth in guest arrivals can be

    ascribed to gourmet, cultural, B2B, entertainment, and sporting events held during the month in

    Abu Dhabi.

    In February 2014, occupancy rates for four- and five-star hotels in Dubai (the UAE) improved to

    87.6%, primarily driven by the several events, including the Dubai Polo G old Cup Series 2014,

    Emirates Airline Dubai J azz Festival 2014, and the Dubai Food Festival 2014 held during the

    month. Occupancy rates in Dubai have remained high despite new supply entering the

    market.

    Oc cupancy rates in J eddah (KSA) expanded for the fourth consecutive month, gaining 1.2 pps

    to 79.3% in February 2014. This was led by c orporate activities that resumed after the December

    and J anuary holidays. In Riyadh (KSA), oc cupancy rates increased 2.2 pps y-o-y to 58.1% in

    February 2014.

    Kuwaits occupancy rate fell 48.4% in February 2014, a 5.5 pps decrease, largely as outbound

    travel rose during the 10-day national holiday.

    Due to the continued political instability and civil unrest in Egypt, the countrys occupancy

    rates declined 1.3 pps to 45.1% in February 2014. Furthermore, several European c ountries

    issued warnings against travelling to Sinai, Egypt, after a tourist bus was bombed in the country,

    killing three South Koreans. In an attempt to revive the countrys tourism sec tor, the

    1STR Global Data, Middle East/Africa Hotel Sec tor Performanc e for February 20142HotStats MENA Chain Hotels Review

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    government has been inviting security delegations from foreign countries to visit Egypt, assess

    safety measures at tourist areas across the country, and lift travel bans.

    AVERAGE DAILY RATE (ADR)ADR increased the most in Dubai (the UAE), rising 9.7% to $287.0 as several important eventsheld during the month allowed hotel owners to hike rates.

    Abu Dhabi (the UAE) reported the largest dec rease in ADR, which declined 22.9% to $148.7 in

    February 2014. This was largely ascribed to an exceptional month in the previous year (February

    2013), when Abu Dhabi hosted the International Defence Exhibition and Conference (IDEX)

    2013, a biennial mega-event, which allowed hotel operators to charge higher rates.

    REVENUE PER AVAILABLE ROOM (REVPAR)

    In February 2014, Manama (Bahrain)s RevPAR grew the most, increasing 37.7% to $120.1,

    followed by that of Amman (J ordan), rising 15.2% to $97.2. Growth in both these markets was

    primarily due to increased occupancy rates.

    Despite the increase in the number of visitors that boosted occupancy rates, Abu Dhabis

    RevPAR dec lined 14.6% to $130.4 in February 2014, impacted by the 22.9% decline in ADR. In

    contrast, Dubais RevPAR rose 7.3% to $321.6 in February 2014, primarily as ADR improved 9.7%

    during the month.

    In Saudi Arabia, Jeddahs RevPAR increased 7.2% to $200.0, driven by 1.2 pps growth in

    occupancy rates.

    Kuwaits RevPAR dec lined 16.4% to $135.9 as the 1.2% increase in average room rates was not

    sufficient to offset the impact of 5.5 pps fall in oc cupancy rates.

    The RevPAR for Sharm El Sheikh (Egypt) fell 12.4% to $22.2 due to a 10.9% decline in average

    room rates. This was ascribed to further rate reductions, as suggested by the countrys tourism

    minister, in an attempt to develop affordable travel packages to attract tourist inflows and

    revive the countrys tourism sec tor.

    Beirut (Lebanon)s RevPAR decreased 31.4% to $55.6, the largest decline in the region. This can

    be ascribed to the 7.9 pps fall in occupancy rate during the month.

    Table 1: Statistics in key MENA countries3

    Occupancy ADR Occupancy ADR

    Country Feb 2014 Feb 2013 Feb 2014 Feb 2013DecFeb2014

    DecFeb2013

    DecFeb2014

    DecFeb2013

    Egypt 45.1% 48.0% EGP421.2 EGP442.9 42.3% 47.6% EGP432.1 EGP443.2

    Saudi Arabia 75.4% 73.5% SAR707.5 SAR658.6 69.1% 63.1% SAR742.0 SAR741.4

    UAE 84.1% 83.7% AED882.9 AED857.2 80.9% 79.6% AED897.1 AED849.4

    3STR Global Data, Middle East/Africa Hotel Sec tor Performance for February 2014, Aranca Analysis

    Denot