MENA’s hotel performance in July 2016

In July this year, hotels in the Middle East reported mixed results, while hotels in Africa posted positive in the three key performance metrics when reported in U.S. dollar constant currency, according to data from STR.

Compared with July 2015, the Middle East recorded a 4.8% rise in occupancy to 58.0%, but average daily rate (ADR) was down 15.9% to US$161.82, and revenue per available room (RevPAR) fell 11.9% to US$93.88. 

Africa experienced a 4.6% increase in occupancy to 56.9%, a 10.8% rise in ADR to US$103.42 and a 15.9% spike in RevPAR to US$58.89.

Performance of featured countries for July 2016 (local currency, year-over-year comparisons):

Kuwait recorded increases across the three key performance metrics: occupancy (+5.1% to 38.0%), ADR (+0.8% to KWD66.36) and RevPAR (+5.9% to KWD25.21). The performance was primarily driven by a 25.9% increase in occupancy in the Kuwait Area submarket. However, in the Kuwait City submarket, occupancy fell 3.8%.

Qatar reported decreases in each of the three metrics. Occupancy in the country fell 6.6% to 53.3%; ADR was down 0.8% to QAR491.68; and RevPAR dropped 7.3% to QAR261.93. According to STR analysts, the month’s performance was mostly affected by an 8.0% year-over-year increase in supply.

Tunisia posted a significant spike in both occupancy (+116.7% to 55.3%) and RevPAR (+100.1% to TND103.37), while the country’s ADR dropped 7.7% to TND187.00. In the comparable month from last year, Tunisia’s occupancy level was just 25.5% following the terrorist attack in Sousse the previous month. Despite the stark year-over-year percentage changes, the absolute occupancy level for July 2016 was actually the highest for any month in Tunisia since October 2014. STR analysts attributed the performance to security efforts in the country and campaigns focused on regaining tourism business. Lower rates also may have played a role in a 114.5% year-over-year increase in demand.

Performance of featured markets for July 2016 (local currency, year-over-year comparisons):

Beirut, Lebanon, saw a 7.3% increase in occupancy to 60.2%. However, ADR was down 12.8% to LBP234,510.72, and RevPAR dropped 6.4% to LBP141,258.21. The absolute occupancy level was the highest for a July in Beirut since 2011. The market’s ADR, however, has decreased year over year for all seven months in 2016, due in part to a 2.9% year-to-date increase in supply.

Dubai, United Arab Emirates, experienced increases in occupancy (+17.6% to 67.5%) and RevPAR (+7.5% to AED365.08), while ADR dropped 8.6% to AED540.60. The market’s demand was up 24.6% year over year with a lift from Eid al-Fitr festivities. At the submarket level, the highest absolute occupancy levels were reported in Jumeirah Palm & Beaches (74.9%) and the Deira & Airport Area (72.0%). ADR continues to be affected by new supply (+5.9% in July).

Johannesburg, South Africa, reported a 5.9% decline in occupancy to 59.2%, but an 8.7% rise in ADR to ZAR908.85 pushed RevPAR up 2.3% to ZAR537.74. The devaluation of the South African Rand has made the country an attractive tourist destination, and Johannesburg hoteliers have capitalized with increased rates, according to STR analysts. ADR has grown in year-over-year comparisons for 36 consecutive months. STR analysts cite political tensions prior to the 3 August elections as a reason behind lower occupancy for July 2016. 

Source: STR