GCC hospitality market to grow at a 7.6%
Date
8/24/2016 12:31:12 AM
The GCC hospitality market is expected to grow at a 7.6 per cent CAGR from an estimated $25.4 billion in 2015 to $36.7 billion in 2020, despite a slowdown in 2016, says a latest report from Alpen Capital's 'GCC Hospitality Industry'. However it is anticipated to recover in the long-term with upcoming events, robust fundamentals and government efforts, driving the continual rise in tourist arrivals and a robust pipeline of hotels and serviced apartments. The report further states that the key operating metrics of the sector is expected to remain under pressure in the short-term, mainly in the UAE and Qatar, but is likely to rebound in the long-term supported by growing demand. During the forecast period, occupancy rates at hotels and serviced apartments are anticipated to grow by three percentage points (ppts) to 70 per cent and Average Daily Rate (ADR) is likely to increase at a 1.4 per cent annualised rate during the period. As a result, the aggregate Revenue Per Available Room (RevPAR) of hotels and serviced apartments in the GCC is projected to grow at a CAGR of 2.3 per cent to $133 by 2020. From 2015 to 2020, the hospitality markets of Qatar and the UAE are expected to demonstrate the fastest annualised growth of over 10 per cent, owing mainly to tourism-related developments ahead of landmark events to be held in these countries. Bahrain is likely to deliver growth in line with the regional average backed by tourism promotion activities and recovery in oil prices. Rest of the GCC nations are likely to register growth in the range of five to six per cent, below the regional average. During the forecast period, the total room supply in the GCC is expected to grow at a four per cent CAGR, slower than 5.7 per cent expansion in international tourist arrivals. "A thriving segment of meetings, incentives, conferences, and exhibitions (MICE), spate of technological advancements, and brisk development of midscale hotel properties are amongst the key factors elevating the appeal of the GCC hospitality sector," said Sameena Ahmad, managing director, Alpen Capital (ME) Limited.
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