Dubai hotels shine in Q1 amid MidEast slump

While Dubai hotels have seen a 10% surge in revenue in the first quarter of 2013, the Syrian conflict has severely impacted the hospitality sector in Middle Eastern countries like Jordan, Lebanon and Egypt, according to a new report by accountancy firm Ernst & Young.

The latest Ernst & Young Middle East Hotel Benchmark Survey the Syrian conflict has had “a significantly negative effect” on its neighbouring countries and, in a damning forecast, predicted “no positive outlook anticipated in the near term.”
Gulf states make up 40% of tourist revenues in Lebanon and Gulf Foreign Ministries have issued travel warnings to their citizens to leave the country.

As a result, average occupancy in the capital Beirut decreased 8% to 58% in the first four months of 2013, while average room rates decreased by 22.9 percent to $162 during the same period.

Jordan’s hospitality market also witnessed a decline, with occupancy down 21% year-on-year to 605 and average room rates dropped 8.9% to $158.

Due to the political instability in parts of Egypt, Cairo’s hospitality market witnessed a downward trend in the first quarter of 2013, with revenue per available room (RevPAR) dropping by ten percent.

Cairo’s hotels were hit even harder, showing a decrease in RevPAR of 36% year-on-year, with average occupancy also down 20% over the same period.

While Syria’s neighbours were suffering as a result of the conflict, the safe haven of Dubai reported positive growth in all key performance Indicators (KPIs). The report found approximately 3500 new branded hotel rooms were added to the Dubai hotel supply chain

“Dubai’s hospitality market has rapidly absorbed this influx of new supply and continues to perform exceptionally well,” the report said. Average room rates increased from $292 to $314, with a two percent year-on-year rise in average occupancy.

As a result, the sector saw an overall annual increase in RevPAR of 9.7%.