(MENAFN- Khaleej Times) Industry braces for usual slowdown in summer months but growth to persist in 2014
The outlook for the hospitality industry across Middle East and North Africa remains positive despite the forthcoming “usual slowdown” in the market during the summer months every year according to latest benchmark survey of Ernst & Young or EY for May 2014.
The Mena hospitality industry remained largely stable in May despite small declines in a few markets. The industry is expected to see a slowdown in the summer months but as a whole strong growth will persist through the rest of 2014.
“May 2014 was another good month for the Mena region’s hospitality industry. As we move into the summer months we can expect to see slight decreases in occupancy rates largely due to the change in climate decrease in visitors and slowdown from the Holy month of Ramadan” Yousef Wahbah Mena head of transaction real estate at EY said in a statement to Khaleej Times on Monday.
ADR drops in Dubai
In May Dubai’s hospitality market witnessed a slight drop with overall average occupancy decreasing by approximately 3.2 percentage points over last year. This was coupled with a slight drop in average daily rate or ADR of 1.2 per cent and decrease in revenues per available room or RevPAR by 2.5 per cent.
“This is mainly due to the additional supply of over 3400 new branded hotel rooms all within four- and five-star hotel segments which have been added to Dubai’s hotel supply over the past year” Wahbah said. He said the May 2014 performance slowed compared to April which is in line with the city’s typical summer season.
“Occupancy fell by approximately five per cent month-on-month basis while average room rates decreased from $327 in April 2014 to $244 in May 2014” he said adding that month-on-month RevPAR also dropped below the $200 barrier as it decreased from $276 in April 2014 to $194 in May 2014.
Habib Khan general manager of Arabian Courtyard Hotel & Spa remained optimistic about Dubai’s hospitality outlook in 2014 and said the industry performed well in the earlier part of the year and it will sustain the trend.
“We are optimistic and expecting the same trend till the end of year 2014 as demand has increased for Dubai and with new routes of Emirates and increased influence of Etihad Airways it’s likely to bring more footfalls towards Dubai” Khan told Khaleej Times.
“We secured adequate business for the next season and finalised some new group series during ITB. Summer will be slightly slow but we are expecting better than last year and the booking trend had shown a positive sign for summer 2014” he added.
About hotel performance he said it was excellent in terms of room rate during the first quarter as ADR improved by five per cent compared to last year. However occupancy is down about two per cent this year. “We had explored some new markets and the response is positive as we recorded more group movement in the last three months than the FIT travellers” he said.
Mena markets
The EY Middle East benchmark survey said key hospitality markets in the Mena region including Manama Amman and Doha witnessed positive increases in May 2014.
Manama recorded an increase in RevPAR of approximately 36.3 per cent in May 2014 due to an increase in average occupancy from 34 per cent to 46 per cent. This was coupled with a slight increase in ADR of 2.4 per cent.
“These increases can be largely attributed to a number of conferences held in Manama and in May the city hosted events for the petrochemicals property construction and architecture industries” Wahbah said.
In Qatar Doha’s hospitality market continues to record positive growth in 2014 with RevPAR increasing by approximately 18.7 per cent in May. This increase in RevPAR was mainly attributed to a rise in average occupancy from 68 per cent in May 2013 to 79 per cent in May 2014. In addition ADR saw an increase of 3.3 per cent in May.
Makkah and Sharm El Shaikh however saw a decline in their hospitality market performance in May 2014 when compared to the same period last year.
The hospitality market in the holy city of Makkah witnessed a decrease in RevPAR from $80 in May 2013 to $58 in May 2014 mainly due to a drop in ADR by approximately 28.4 per cent. The decrease in ADR can be attributed to the hotel operators’ pricing strategies in order to attract visitors to Makkah.
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