Aranca MENA Tourism and Hospitality Report Q3 2014 | Aranca Special Report

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Transcript of Aranca MENA Tourism and Hospitality Report Q3 2014 | Aranca Special Report

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    MENA Tourism and

    Hospitality Report

    Theme: Green Tourism

    Q3 2014

    aranca.com

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    able Table of Contents

    01.

    MENA Tourism Synopsis .............................................................................................. 1

    02.

    Hospitality Market Update ........................................................................................ 2

    03. Kuwait Tourism Industry .............................................................................................. 6

    04.

    Theme: Green Tourism ............................................................................................... 8

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    MENA Tourism and Hospitality ReportQ3 20142

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    02Hospitality Market Update12The hotel industry in the Middle East & Africa (MEA) reported positive performance in

    Q3 2014. Despite ADR declining from $156.54 in July to $145.12 in September, steady

    growth in occupancy rates from 49.3% in July to 65.5% in September caused RevPAR

    to increase from $77.15 in July to $94.99 in September 2014

    OCCUPANCY RATE

    PERFORMANCE IN JULY

    In July 2014, visitor demand in Cairo (Egypt) increased, boosting occupancy rates by 12.5 pps1

    to 29.3% compared with the same period last year. Although occupancy levels were below

    those in 2013, growth in performance levels during previous months is a positive sign and

    indicates the market is scheduled to achieve performance levels exceeding those in 2013.

    Occupancy Doha (Qatar) improved by 5.5 pps2to 47.6%, driven by increased regional leisure

    tourist demand.

    Abu Dhabi (UAE)soverall occupancy levels stood strong at 50.3%2 in July 2014, boosted by

    robust regional visitor demand.

    Occupancy rates in Riyadh (KSA) fell slightly by 0.3 pps2 in July 2014. The month of Ramadan

    has historically resulted in substantially lower levels of demand and July was no exception, with

    the overall market achieving an average occupancy of 38.3%. In contrast, Makkah and

    Medina (KSA) witnessed an influx of travelers during Ramadan, with more than 20% 1

    occupancy growth in both markets.

    Dubai (UAE)soccupancy levels declined 4.6 pps2to 50.3% in July 2014. Hotels in Dubai were

    impacted by the collective effect of the annual deceleration in summer and the occurrence

    of Ramadan throughout the month.

    Occupancy rates in Amman (Jordan) decreased 8.7 pps1 to 34.4%, reporting the largest

    decline the occupancy metric in the region.

    PERFORMANCE IN AUGUST

    In August 2014, Cairo (Egypt) reported the largest increase in occupancy rates of 37.8 pps1to

    58.8%, driven a rise in hotel demand. Hotels in Cairo welcomed the largest number of guests in

    August than in any other period since the protests in the country intensified.

    1STR Global Data, Middle East/Africa Hotel Sector Performance for July, August, September 20142HotStats MENA Chain Hotels Review (Only Four and Five Star Hotels)

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    Riyadh (KSA) experienced the second largest growth in occupancy rates of 12.5 pps1to 48.3%

    in August 2014. The conclusion of Ramadan led to resumption of corporate activity, which

    improved demand in the city. Furthermore, several local and regional conferences and events

    resulted in an increase in corporate tourist inflows.

    Demand in Jeddahshotel market increased, with occupancy rates growing 6.8 pps2to 77.0%.

    Jeddahspopularity as a premier leisure destination in the Kingdom continues to drive strong

    levels of domestic leisure travelers to the city, especially during the Eid Al Fitr holiday and

    summer school holidays.

    Hotels in Kuwait experienced weakening market conditions, as occupancy declined by 1.5

    pps2to 35.6% in August 2014. Due to the absence of any distinct leisure or retail attractions in

    Kuwait, hotels struggled to capture a suitable share in the leisure segment from domestic and

    regional markets during the summer holidays. The lack of diversification of Kuwaits leisure

    attractions significantly impacts the market during the summer months as corporate activity

    slows and residents travel abroad to other destinations in the region and globally.

    Occupancy in Doha (Qatar) increased 13.3 pps2

    to 59.9%, largely due to the influx of leisuretravelers, who benefitted from the remaining summer and Eid holidays that extended into

    August for certain GCC nations. This trend is positive for the realization of the National Tourism

    Strategy 2030, which aims to diversify its demand base to include a greater proportion of

    regional travelers through the development of cultural assets and family-based leisure

    attractions.

    Abu Dhabi (UAE)shotel market continued to improve performance levels as occupancy rose

    7.5 pps2 to 71.3%. The culmination of Ramadan and Eid Holidays in the beginning of August

    enabled hotels in Abu Dhabi to attract a robust number of regional travelers to the citys

    entertainment and shopping attractions. Furthermore, the Tourism and Cultural Authority

    (TCA)s

    proactive approach to promote the destination in emerging markets, particularly

    China, resulted in a 189% increase in room nights purchased by Chinese visitors in the first six

    months of 2014 vis--vis the same period in 2013.

    PERFORMANCE IN SEPTEMBER

    Occupancy in Sharm El Sheikh (Egypt) increased the most, by 43.5 pps2to 77.7%, in September

    2014. Efforts undertaken by prominent travel associations and tour operators to attract visitors

    to the Red Sea destination boosted occupancy rates.

    In September 2014, Cairo (Egypt)s occupancy rates expanded 26.8 pps1 to 51.8%.

    Improvement in security and the social environment helped the market regain confidence.

    Occupancy rates in Abu Dhabi (UAE) increased 6.6 pps2 to 76.6%. The upward trajectory in

    occupancy rates is forecast to continue during the next couple of months as the city prepares

    for high season, with notable events such as the Formula 1 Abu Dhabi Grand Prix and the

    opening of the much-anticipated Yas Mall scheduled in November.

    Jeddah (KSA)soccupancy rates rose 2.3 pps2to 85.9%, predominantly driven by the lack of

    new hotels entering the city and increased proliferation of demand particularly in the

    corporate and conferencing segments. Demand is anticipated to remain strong as numerous

    infrastructure and mixed-use projects are under development in the city.

    Occupancy levels in Dubai (UAE) increased 2.1 pps2to 78.2% in September 2014 as the market

    returned to business after the summer.

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    AVERAGE DAILY RATE (ADR)

    PERFORMANCE IN JULY

    In July 2014, Jeddah (KSA) was the regionsonly market to report a double-digit increase in

    ADR (up 12.5%1

    to $286.28). Abu Dhabi (UAE) followed, with 5.1% growth to $114.10 due to ashift in hoteliersyield strategies in response to robust overall occupancy levels. Average rates

    in Abu Dhabis market have declined steadily since August 2011; however, this trend has

    started to reverse, with hotels ADRsgradually rising during the first five months of 2014, fuelled

    by strong regional visitor demand. This is expected to continue through 2014, especially as

    hoteliers prepare for peak season.

    ADRs in Dubai (UAE) increased 1.1%2to $202.94 in July 2014.

    Cairo (Egypt)shotel market experienced an increase of 1.0%2to $114.85, with the new political

    situation providing market stability.

    Hotels in Doha (Qatar) recorded a marginal increase of 0.7%2

    in ADR to $201.56 in July 2014.

    ADRs in Riyadh (KSA) decreased the most by 4.8%1to $207.05 in July 2014.

    PERFORMANCE IN AUGUST

    In August 2014, Cairo (Egypt)s ADR grew the most by 8.6%1 to $108.29. Political stability

    boosted demand, enabling hoteliers to adopt more progressive pricing strategies. The Ministry

    of Tourisms promotional campaign, launched in July to attract tourists to the country,

    benefitted hotels and is expected to improve tourism demand in the coming months.

    ADRs Jeddah (KSA) rose 8.4%2to $296.64 in August 2014, driven by increased demand.

    Doha (Qatar) registered a decline of 3.0%2 in ADR to $215.61 in August 2014. Furthermore,

    Kuwaits ADRs decrease 3.8%2 to $261.54. The lack of diversification in Kuwaits leisure

    attractions adversely impacted the market during the summer months.

    ADRs in Dubai (UAE) decreased 5.6%1to $181.83 in August 2014. Eid celebrations shifted from

    August to July this year, causing Dubai hotels to experience a decline in hotel performance in

    August 2014.

    PERFORMANCE IN SEPTEMBER

    In September 2014, four markets recorded ADR increases exceeding 10%. ADRs in Sharm El

    Sheikh (Egypt) expanded the most, by 18.2%2to $50.39 in September 2014, whereas those in

    Cairo (Egypt) improved 12.7%1to $107.86. The relative stability in Egypt in recent months was

    refl