Half-year financials to June 30, 2011, published by major hotel companies this month showed declines in revenue and occupancy in the MENA hotel markets most affected by the Arab Spring, but experts predict a fast recovery.
InterContinentalHotels Group (IHG) attributed “significant declines” in RevPAR across its hotels in Egypt and Bahrain to political unrest. Uprisings were said to have led to a US $1 million decline — to $31 million — in managed operating profit. Meanwhile, EMEA achieved a 4% RevPAR in crease, but this grew to 5.3% when excluding these two countries.
Likewise, Starwood Hotels & Resorts said the Middle East and Africa was the only region in which it operates to see declining RevPAR in the second quarter. RevPAR fell by seven percent in the region while worldwide, Starwood-branded hotels saw revenues grow by 18.5% over the same period last year.
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The US company said in a statement that it had been "negatively impacted" by events in the MENA region, a reference to the uprisings.
“Reading headlines, it’s easy to feel skittish about the near term. There are many factors that could upend this recovery,” CEO Frits van Paasschen said.
However, Jalil Mekouar, managing director - Middle East & Africa for Jones Lang LaSalle Hotels, predicted that recovery in the region could be surprisingly quick.
“Whereby the recovery period for such events that occurred 10-15 years ago may have been years, we’re now seeing that fortunately guests are becoming ‘crisis proof’ so the recovery time is much shorter – just months even,” he told Hotelier.
Mekouar suggested that a greater resilience to potential travel disruptions among tourists was due to the level of political, social and economic upheaval, natural disasters, health scares and terrorist attacks happening worldwide over recent years. He said people were becoming “used to” risky circumstances and so often remained undeterred in their travel plans.
“I expect tourism will come back fast, especially in Egypt. Tourists will weigh the risks to benefits such as lower prices. Good deals offered by the hotel sector will support a rebound on the occupancy front,” he added.
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