MENA hospitality sector CAGR to grow 7.6% over 2015-2020
The long-term outlook for MENA remains robust with the market expected to grow at a CAGR of 7.6% from an estimated US$25.4 billion in 2015 to US$36.7 billion in 2020, according to Alpen Capital's 'GCC Hospitality Industry Report'.
Measures are in place to diversify the economy to buffer against low oil prices and currency depreciation, for example encouraging private sector investments, building new attractions, expanding airport capacity and increasing international promotional campaigns. A raft of hospitality projects are also in the pipeline to capitalise on the increased demand for accommodation, Alpen Capital reported.
Some markets like the UAE and Qatar are forecasted to remain under pressure in the short-term but with a likelihood to rebound in the long-term due to growing demand. Occupancy rates for hotels and serviced apartments are predicted to grow 3 percentage points to 70% with the American Depositary Receipt (ADR) to average between US$168 and US$190, an annual growth of 1.4%. The aggregate RevPAR of hotels and serviced apartments in the GCC is projected to increase at a CAGR of 2.3% to US$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%, owing mainly to tourism-related developments ahead of landmark events to be held in these countries," reported Alpen Capital.
Aided by a thriving tourism market, and international and regional investors, the growth trajectory of the GCC hospitality is set to remain firm.
Source: Alpen Capital 'GCC Hospitality Industry Report'