MENA Tourism and Hospitality Report - Q4 2014 | Special Reports Aranca

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Transcript of MENA Tourism and Hospitality Report - Q4 2014 | Special Reports Aranca

  • MENA Tourism and

    Hospitality Report

    Theme: Niche Tourism

    Q4 2014

    aranca.com

  • Table Table of Contents

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

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

    03. Oman Tourism Industry .............................................................................................. 6

    04. Theme: Niche Tourism ................................................................................................ 9

  • MENA Tourism and Hospitality Report Q4 2014 1

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    01 MENA Tourism Synopsis The tourism industry in MENA is showing signs of recovery. The regions share in the

    total number of international tourists is expected to increase from 6% in 2014 to 8%

    by 2030.

    MENA TOURISM & HOSPITALITY

    According to the United Nations World Tourism Organization (UNWTO) World Tourism

    Barometer 2015 published by the UN World Tourism Organization, international tourism in the

    Middle East (+4%) showed signs of rebound in 2014 with positive results in most destinations. The

    region saw an additional 2 million tourists in 2014, bringing the total arrivals to 50 million.

    In Q4 2014, the hospitality sector in the MENA region witnessed mixed results. Performance

    metrics declined marginally during the period; the occupancy rate fell from 67.6% in October

    to 63.3% in December, the ADR declined from $182.34 to $165.97, and RevPar dropped from

    $123.19 in October to $105.13 in December 2014. Despite the decline in hospitality indicators,

    government efforts boosted market confidence, thereby resulting in market revival.

    Increased government funding for tourism-related activities, marketing initiatives, expansion of

    thematic sites and zones, and advanced regional infrastructure are some of the factors driving

    the GCCs non-conventional ecotourism market. GCC ecotourism is estimated to record a

    CAGR of 6.2% between 2015 and 2020. Saudi Arabia (KSA) accounted for the largest share of

    the ecotourism revenue (30.9%) in 2014.

    The KSA government expects to generate a record SAR 60.9 billion (US $16.2 billion) in tourism

    revenues by 2023. This projection is in line with the increase in the number of Hajj and Umrah

    tourists. The government plans to invest more than US $30 billion in airports by 2020, including

    $10 billion in private investment. Furthermore, the Saudi Commission for Tourism and Antiquities

    (SCTA) plans to issue tourist visas from June 2015. The initiative could attract more than 7 million

    travelers to the Kingdom in the first year of its implementation, and also result in earnings of SAR

    35 billion every year.

    In 2014, a UAE Cabinet Resolution authorized the implementation of the new visa and fees

    system. The amendments included a new multiple-entry tourism permit for cruise passengers for

    ADR 200 (US$ 50) and a range of entry permits for medical tourists and their companions. The

    multiple-entry permit is cost-effective and logistically convenient, and is likely to benefit key

    markets, including India, China, Russia and CIS, South Africa and Brazil. The move resulted in a

    7% increase in the number of people travelling through Dubai ports in 2014, and further growth

    is expected in 2015.

  • MENA Tourism and Hospitality Report Q4 2014 2

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    02 Hospitality Market Update12 The hotel industry in the Middle East & Africa (MEA) region reported mixed

    performance for Q4 2014. While performance metrics declined during the period,

    increased consumer confidence and political stability led to the revival of markets.

    OCCUPANCY RATE

    PERFORMANCE IN OCTOBER

    In October 2014, Cairo (Egypt) recorded the highest increase (27.0 pps1) in occupancy rates to

    55.3%, compared with the same period last year, owing to increased demand from the leisure

    segment. Hotels in Cairo benefited from the corporate and leisure segments, particularly from

    the FIT and group business.

    Occupancy rate in Manama (Bahrain) grew 4.5 pps2 to 55.9% in October 2014, driven by an

    increase in the demand for hotels. Initiatives by the Bahraini government, such as the

    recommencement of key infrastructure and mixed-use development projects, are attracting

    more corporate travelers to Manama, which at present is the key driver of hotel demand in the

    city. In addition, growing confidence in the Bahraini market has resulted in a higher proportion

    of leisure visitors from neighboring GCC countries, which supported the overall improvement in

    performance levels; however, conferencing demand witnessed a marginal decline as a result

    of promotional efforts by Dubai, Doha and Abu Dhabi.

    Hotel occupancy in Kuwait improved by 4.5 pps2 to 53.5% in October as corporate demand

    increased after summer.

    Occupancy rates in October 2014 declined by 0.91 pps and 2.81 pps in the UAE and KSA,

    respectively, because of low demand.

    Amman (Jordan) saw the highest decline of 3.5 pps2 in its occupancy rate, which dropped to

    58.8% in October 2014 due to lower demand as a result of the ongoing civil unrest in

    neighboring countries and the emergence of ISIS. Although marginal improvements were

    recorded in the conference and leisure segments, primarily driven by domestic demand, the

    overall hotel performance softened due to the decline in the dominant corporate segment,

    which has been negatively affected by the unrest.

    1 STR Global Data, Middle East/Africa Hotel Sector Performance for October, November, December 2014 2 HotStats MENA Chain Hotels Review (Only Four and Five Star Hotels)

  • MENA Tourism and Hospitality Report Q4 2014 3

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    PERFORMANCE IN NOVEMBER

    In November 2014, Cairo (Egypt) reported a 17.3 pps1 increase in the occupancy rate to 50.5%

    the highest in the region. This was primarily driven by increased confidence in the market,

    thanks to the governments efforts to prioritize and protect tourism with necessary security

    arrangements.

    Occupancy rates in Doha (Qatar) increased by 10.32 pps to 82.9% in November 2014.

    Occupancy in the city has reached the highest level in the past two years, primarily led by

    corporate demand. The leisure segment still remains a challenge for Doha. Efforts by the Qatar

    Tourism Authority (QTA) and the anticipated launch of new attractions are expected to

    promote Doha as a leisure destination.

    The occupancy rate in Dubai (UAE) dropped 1.1 pps2 to 86.7% in November 2014. The

    hospitality sector faced demand and supply challenges, which impacted performance during

    the month. Demand was affected by political and economic instability in Russia and some

    eastern European countries. Visitors became wary because of the decline in Ruble and higher

    rates in Dubai. New supplies in the market have also made the sector more competitive.

    Jeddah (KSA) experienced the largest decrease of 4.4 pps2 to 74.7% in November 2014.

    PERFORMANCE IN DECEMBER

    In December 2014, two markets reported a double-digit increase in occupancy.

    Occupancy in Cairo (Egypt) increased the most, by 17.4 pps1 to 52.6%. Efforts undertaken by

    the government to ensure socio-political stability resulted in the lifting of the travel ban imposed

    by some Western countries, which further pushed up demand.

    Occupancy rates in Abu Dhabi (UAE) surged 10.1 pps2 to 83.1%. Increased demand for leisure

    in the second half of the year, driven by the opening of the Yas Mall (end-November 2014) and

    continued promotional campaigns by the Abu Dhabi Tourism and Culture Authority, boosted

    occupancy levels.

    Occupancy rates in Doha (Qatar) increased 9.9 pps1 to 74.4% as demand and supply

    stabilized due to the influx of rooms in the past.

    Manama (Bahrain)s occupancy rate rose 4.1 pps2 to 46.1% owing to political stability.

    In December 2014, occupancy levels in KSA increased 3.0 pps1 to 62.8%, as delays in new hotel

    supply coupled with consistent tourism demand is stabilizing the market.

    Occupancy levels in Dubai (UAE) increased by 1.4 pps2 to 82.2% in December 2014 as tourism

    thrived with continued influx of tourists.

    AVERAGE DAILY RATE (ADR)

    PERFORMANCE IN OCTOBER

    In October 2014, Cairo (Egypt) recorded the highest ADR increase (up 16.7%1 to $116.24) on

    account of growing demand from the leisure segment.

    Jeddah (KSA) reported the second-largest ADR increase of 12.5%1 to $270.58 in October 2014.

    Manama (Bahrain) recorded an ADR increase of 11.2%2 to $213.13 in October 2014 due to

    increase in hotel demand and market stability.

  • MENA Tourism and Hospitality Report Q4 2014 4

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    Kuwait witnessed a 7.0%2 increase in the ADR to $281.87, driven by a revival in corporate

    demand.

    Hotels in Amman (Jordan) recorded a marginal increase of 1.1%2 in the ADR to $160.90 in

    October 2014; this increase was partially offset by civil unrest in neighboring countries.

    ADRs in Abu Dhabi (UAE) decreased the most, by 9.2%1 to $154.75.

    PERFORMANCE IN NOVEMBER

    Jeddah (KSA)s ADR grew the most in November 2014, by 9.2%1 to $236.88. This growth was led

    by aggressive rate strategies t