Bahrain tourism sector still in doldrums on unrest

Tourism demand has yet to return to Egypt, Bahrain and the Levant region a year since the start of the Arab Spring, latest data compiled by STR Global has showed.

The leading provider of market data to the hotel industry said that Manama, Bahrain, had experienced the strongest demand decline across the GCC region.

As a result, occupancy and average daily rates (ADR) had declined by 37.6 and 12.9 percent respectively year-to-December 2011, reporting 41.6 percent occupancy and BD77.44 ADR.

Last month, rating agency S&P said the immediate damage to the Bahrain's real economy from the unrest had been limited.

"Business activity has remained largely unaffected except for the comparatively small tourism sector. The outflow from Bahrain's international financial sector also appears to be stabilising, at least for banks," it said.

STR Global also said Kuwait, with limited new supply, saw a strong occupancy growth (up 10.7 percent) in 2011.

It added that robust demand growth helped to boost occupancy and ADR in Dubai and Riyadh, reporting occupancy increases by 7.0 percent and 2.5 percent respectively.

ADR grew by 6.4 percent in Riyadh and 3.4 percent in Dubai, the company said in a statement.

New supply in Doha, Qatar (up 13.0 percent) and matching demand growth at 13.0 percent led to flat occupancy levels (60.6 percent) and only a slight increase in ADR (up 0.7 percent).

In Cairo, Egypt, where protests have been among the most violent, occupancy declined by 29.5 percent to 36.1 percent in 2011 and ADR declined by 3.3 percent to E£706.26.

In the usually popular leisure destinations of Sharm El Sheikh, Egypt, and Hurghada, Egypt, occupancy reached 48.1 percent (down 38.6 percent) and 57.2 percent (down 28.7 percent) respectively.

In the Levant region, STR Global said demand declined in the main cities such as Beirut, Lebanon (down 12.2 percent), and Amman, Jordan (down 6.8 percent).

It resulted in a RevPAR drop by 22.2 percent in Beirut and 9.2 percent in Amman, despite that most of the unrest has been taking place in Syria and Egypt.

Elizabeth Randall, managing director at STR Global, said: “A sense of insecurity across Northern Africa and Egypt has led leisure and business travellers to seek alternative destinations.

"As a result, hotels in the Arabian Peninsula saw demand increase by 13.2 percent. Security in the region will be vital before expecting large numbers of tourists to return.

"The good news in the 2011 performance is that average rate across Northern Africa, Egypt and the Levant region has remained on par with the previous year (-0.5 percent in USD) and declining occupancy has started to show signs of stability in the second half of the year."