Aranca Mena Tourism and Hospitality Report - July 2014

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Transcript of Aranca Mena Tourism and Hospitality Report - July 2014

  • 1. MENA Tourism and Hospitality ReportTheme: Shopping TourismJuly 2014aranca.com

2. Table Table of Contents01. MENA Tourism Synopsis..............................................................................................102. Hospitality Market Update ........................................................................................203. Bahrain Tourism Industry ............................................................................................404. Theme: Shopping Tourism.........................................................................................605. Hotel Pipeline and Expansions .................................................................................806. Trends in Hospitality and Tourism in GCC..............................................................10 3. MENA Tourism and Hospitality Report July 20141Connect with us:01MENA Tourism SynopsisMENAs tourism industry witnessed a decline in visitors in Q12014 due to ongoing unrest in the region. However, the sector is expected to flourish in Q22014, driven by increasing consumer confidence and government support toward boosting tourism- related revenuesMENA TOURISM & HOSPITALITYAccording to the United Nations World Tourism Organization (UNWTO) Confidence Index, the number of tourists visiting the Middle East declined almost 4% during Q12014, impacted by continuing unrest in the region. In Q12014, the Middle East was the only region to post a decline in visitor numbers globally. However, the UNWTO anticipates positive prospects for the region in Q22014, driven by increased confidence, particularly in the private sector.In May 2014, key hospitality sector indicators improved in MENA. The occupancy rate grew 1.2 percentage points (pps) y-o-y to 63.5% and the average daily rate (ADR) increased 3.1% y-o-y to $154.14. Consequently, revenue per available room (RevPAR) rose 5.1% y-o-y to $97.94. During the month, the occupancy rate increased in Manama (Bahrain), Doha (Qatar), and Riyadh (KSA), whereas it decreased in Dubai (the UAE), Kuwait, and Egypt. In terms of ADR, Amman (Jordan) was the best performing market, rising 13.8% to $184.77, driven by various conferences held across the country. In contrast, Riyadh (KSA)s ADR decreased the most (down 6.1% to $241.65). RevPAR expanded more than 20% in two markets, Manama (Bahrain) and Amman (Jordan), whereas it fell the most (4.0% to $49.40) in Cairo (Egypt), primarily impacted by the citys lower occupancy rates.Omans government aims to attract 12 million visitors by 2020 as compared to 2.1 million in 2013. In line with this, the country envisages and investment of $14.7m for the tourism sector between the 201115 period. Until May 2014, two five star hotels had been opened in Oman. A new passenger terminal at the Muscat International Airport, estimated to have a capacity of 12 million passengers annually, is also being constructed.In July 2014, the Saudi Commission for Tourism and Antiquities (SCTA) launched a mobile phone-complaint service to allow citizens and expatriates to report any lack of proper facilities. This would allow the organization to improve services and facilities.In July 2014, Reef Worlds, a Los Angeles-based dynamic reef developer, announced plans to create unique underwater theme parks for waterfront resorts in Qatar. This would provide the country global on the global dive and snorkel tourism market, valued at at $3bn. The Reef Worlds development team is in discussion with two resort developers for this project. 4. MENA Tourism and Hospitality Report July 20142Connect with us:02Hospitality Market Update12The Middle East & Africa (MEA)s hotel industry reported positive performance in May 2014. The occupancy rate rose 1.2 pps y-o-y to 63.5% and ADR grew 3.1% y-o-y to $154.14, resulting in a RevPAR increase of 5.1% y-o-y to $97.94OCCUPANCY RATEIn May 2014, Manama (Bahrain) reported the highest increase in occupancy rates, which rose 13.0 pps y-o-y to 56.9%. Despite having a low base in 2013, occupancy grew the most in the country. This can be attributed to events hosted by the petrochemicals, property, and construction & architecture industries, along with several other conferences held during May.In Doha (Qatar), the occupancy rate advanced 8.7 pps y-o-y to 75.8%. Occupancy rates in the city have historically been in the range of 6768% in May. However, in May 2014, Doha had the highest occupancy rates in the past three years. The increase in occupancies can be ascribed to growth in the meetings, incentives, conferences, and exhibitions (MICE) segment, particularly due to QITCOM, the countrys largest information and communication technology (ICT) event, which was held during May 2628 and drew in 11,000 attendees. Occupancy rates were further supported as Qatar Airways added four international routes as part of its expansion plan.Occupancy rates in Riyadh (KSA) grew 9.8 pps2 to 68.6% due to robust demand from corporate companies. The city typically experiences lower corporate demand during May. However, various exhibitions, seminars, and conferences led to a high influx of corporate visitors.Dubai (UAE)s occupancy rates remained strong at 82.2% despite a marginal decline of 0.9 pps2. Leisure demand in the city was steady, accompanied by high-profile international events during May. These included The International Design Exhibition (May 1922), Beauty World Middle East (May 2729), Arabian Travel Market (May 0508), and Dubai Airport Show (May 11 13), which collectively attracted 70,000 visitors.In Kuwait, May typically marks the onset of the annual slowdown in summer, resulting in weaker corporate demand. Occupancy rates decreased 3.3 pps2 to 52.3% in May 2014 vis--vis previous years, when occupancy rates declined to levels below 40%.In May 2014, occupancy rates decreased the most in Egypt, falling 5.8 pps to 48.0%, impacted by ongoing protests in various districts and uncertainty regarding the Presidential elections (held during 2628 May).1 STR Global Data, Middle East/Africa Hotel Sector Performance for May 20142 HotStats MENA Chain Hotels Review (Only Four and Five Star Hotels) 5. MENA Tourism and Hospitality Report July 20143Connect with us:AVERAGE DAILY RATE (ADR)In May 2014, the ADR in Amman (Jordan) increased 13.8% to $184.77, primarily driven by conferences hosted in the city during May. These include The Special Operation Forces Exhibition (May 5), Sofex Trade Show (May 68), Investing in the Levant (May 8), and The Soccerex Asian Forum (May 1314).ADR in Kuwait rose 12.8% to $254.8 in May 2014, boosted by various regional events promoting growth in MICE. Moreover, hotels in the city have rate agreements specifically designed for periods of low demand, to prevent average rates from falling below threshold limits.In Dubai (UAE), ADR grew 4.6%2 to $301.09 during May 2014, driven by higher average rates of 18.4% and 11.3% in the MICE and leisure segments, respectively.Cairo (Egypt)s ADR expanded 2.8% to $111.272 due to increased leisure demand.In May 2014, ADR decreased the most in Riyadh (KSA), where it fell 6.1% to $241.65.REVENUE PER AVAILABLE ROOM (REVPAR)In May 2014, Manama (Bahrain) witnessed the highest increase in RevPAR of 28.8% to $112.86, driven by higher occupancy rates.RevPAR rose 21.1% in Amman (Jordan) to $136.92 due to growth in ADR.Despite reporting the largest decrease in ADR, Riyadh (KSA)s RevPAR improved 12.6% to $169.40, owing to strong occupancy rates during May 2014.Doha (Qatar)s RevPAR advanced 12.2%2 to $170.48 in May 2014. Despite a 4.1% decline in ADR to $222.19, RevPAR rose due to an 8.7 pps increase in occupancy rates.RevPAR in Dubai (the UAE) grew 3.5%2 to $247.61, primarily due to the higher ADR. Hotels in Dubai benefitted from high-profile international events and robust leisure demand.Kuwaits RevPAR improved 2.0%2 to $144.48 in May 2014. This can be ascribed to a significant increase in ADR, which was slightly offset by lower occupancy rates.In May 2014, Cairo (Egypt) recorded the largest decrease in RevPAR of 4.0% to $49.40 due to low occupancy rates.Table 1: Statistics in key MENA countries3OccupancyADROccupancyADRCountryMay 2014May 2013May 2014May 2013MarMay 2014MarMay 2013MarMay 2014MarMay 2013Egypt48.0%53.8%EGP469.6EGP475.847.9%55.8%EGP469.2EGP467.6Saudi Arabia66.3%64.0%SAR636.8SAR645.170.6%68.6%SAR676.7SAR679.6UAE75.3%74.9%AED686.1AED675.380.5%79.0%AED813.9AED789.03 STR Global Data, Middle East/Africa Hotel Sector Performance for May 2014, Aranca AnalysisDenotes increase in parameterDenotes decrease in parameter 6. MENA Tourism and Hospitality Report July 20144Connect with us:03Bahrain Tourism Industry4Bahrains tourism industry is set to develop significantly, with international tourist arrivals estimated to reach 6.8 million by 2024. Infrastructure investments, the relaxed visa policy, and various events are aimed at positioning Bahrain as a tourist destination International tourist arrivals to increase to 6,792,000 by 2024: In 2013, Bahrains travel and tourism industry ranked 94th worldwide in terms of absolute contribution to GDP. The World Travel & Tourism Council (WTTC) forecasts the number of international tourists visiting Bahrain to reach 6,792,000 by 2024 from 4,504,000 in 2014, with revenues expanding at a CAGR of 4.9% to BHD1,151.9 million during 201424. Direct contribution to GDP to reach BHD882.7 million by 2024: The travel and tourism industrys direct contribution to GDP is projected to increase at a CAGR of 5.8% to BHD882.7 million (5.1% of GDP) by 2024 from BHD500.2 (4.1% of GDP) in 2013. Leisure tourism comprises major share: In 2013, inbound and domestic tourists spent BHD 953.4 million on travel & tourism. Leisure tourism contributed the majority (85% or BHD810.4 million) to spending, whereas business accounted for the remainder (15% or BHD143.0 million). Leisure spending grows faster than business spending: Leisure travel spending is antic