Dubai hotels have highest occupancy, room rates during Q1 in MENA

Dubai hotels achieved the highest occupancy, average room rate (ADR) and revenue per available room (RevPAR) across the MENA region during the first quarter of 2018.

According to the latest EY Middle East Hotel Benchmark Survey Report, the city’s occupancy reached 86.9% with an ADR of $293, which led to an overall RevPAR of $255 in Q1.

It said occupancy in Dubai increased by 0.8%, possibly due to international visitors of the 23rd edition of the Dubai Shopping Festival as well the favourable weather.

Driving the overall performance for Dubai were the hotels located on the beach, which demanded an average room rate of $559.

EY said the hospitality market in Abu Dhabi also registered an increase in occupancy by 7.3% to 86.6% in Q1 but ADR decreased by 14.7% to $104, leading to a decrease in RevPAR by 6.9% to $90.

In the UAE, Ras Al Khaimah also saw an increase in occupancy by 4.5% to 79.8 percent in Q1, a rise in ADR by 5.4% to $174 and a 11.6% jump in RevPAR.

In Saudi Arabia, Madinah, Riyadh and Makkah all witnessed an increase in occupancy but Jeddah witnessed a decrease of 5.7% to 48.7% in Q1. Jeddah also witnessed a decrease in ADR by 5% to $187 and a decline in RevPAR by 15% to $91.

EY said the drop in performance in the Jeddah market could be attributed to an oversupply of hotels in the market along with softer macro-economic conditions.

The Riyadh hospitality market witnessed growth across all indicators with its occupancy increasing by 3.9% to 60.9%.

In Bahrain, the Manama market saw a 10.6% increase in occupancy to 59.7% but ADR decreased by 6.2% to $176. The market still saw a Q1 growth in RevPAR by 14.1% to $105. The increased occupancy can be attributed to the Bahrain Shopping Festival, which attracted around 122,000 visitors to the country.

In Kuwait, hotels recorded a 2.5% increase in occupancy to 67.5% while ADR rose by 4.5% to $200 and RevPAR increased by 8.5% to $135.

In Oman, the Muscat hospitality market also registered an increase in occupancy to 84.4% in Q1 while ADR witnessed a 3.9% rise to $175 and RevPAR jumped by 5.3 percent to $148.

Yousef Wahbah, MENA Real Estate, Hospitality and Construction Sector leader, said: “The performance across the MENA region in Q1 saw a steady growth influenced by positive factors such as countries like the UAE, Saudi Arabia and Bahrain improving their international trade relations.

"The growth in occupancy rate was consistent throughout the first quarter, which shows a healthy traction of visitors to the region, many of whom most likely wanted to enjoy the pleasant weather conditions before the summer heat sets in.

"As events wind down in the second quarter of the year because of the start of the holy month of Ramadan and the summer season, we can expect a decline in occupancy across most of the GCC hospitality markets.”